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Dr. Laura Whitcomb BUS 4970 Fall 2018
Corporate Strategy Dr. Laura Whitcomb BUS 4970 Fall 2018
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Levels of Strategy Corporate Level Business Level Functional Level
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Corporate Strategy Generic Alternatives/Grand Strategies
Stability Expansion Retrenchment Combination
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Expansion/Retrenchment Generic Choices
How? Internal External Alliances What? Vertical integration Horizontal integration Diversification: related/unrelated
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Nestle’s Corporate Strategy
2001 Acquired Purina pet food 2002/5 Acquired Dreyer’s Ice Cream 2006 Acquired Novartis nutrition business & Jenny Craig diet products 2007 Acquired Gerber baby foods WSJ 7/23/07 From Swiss retailers to US institutional investor pressures 29% of L’Oreal
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Wall Street Journal 2/18/17
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Unilever & Kraft Mergers & Acquisitions WSJ 2/18/17
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ATT & TimeWarner Merger WSJ 11/22/17
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For AT&T and Time Warner, It’s Finally D-Day. WSJ. 6/12/18.
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Expansion/Retrenchment Generic Choices
How? Internal External Alliances What? Vertical integration Horizontal integration Diversification: related/unrelated
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Vertical Integration
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PepsiCo Related Diversification Global Divisions, 2016
CEO: Indra Nooyi Exec. VPs: Franchise, Legal, HR, CFO, Operations, R&D, Communications North America Beverages Pepsi, Gatorade, Mountain Dew, Naked Juice, Lipton & Starbucks partnerships, Tropicana Frito-Lay North America Lays, Doritos, Stacy’s, Rold Gold, Tostitos Quaker Foods North America Chewy Granola Bars, Medleys & Life cereals, Popped Crisps Latin America Sabritas, Gamesa Europe Sub-Saharan Africa Wimm-Bill-Dann (Russia); Marbo Asia, Middle East & North Africa
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Synergy – Disney 1957 The force is strong in this firm. The Economist
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Disney & Fox seal deal. WSJ. 12/15/17.
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Disney nears pact to acquire assets from 21st Century Fox. WSJ
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Disney deal for Fox would end era of the ‘Big Six’ studios. WSJ
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United Technologies Conglomerate Structure (2018)
CEO: Gregory Hayes VPs: HR, Digital & Information, Operations & Strategy, Technology, General Counsel, Financial, Government Relations, Science & Technology, Communications Otis Elevator Pratt & Whitney Aerospace Systems Climate, Controls & Security
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3M (2018) Conglomerate/Unrelated Diversification
CEO: Inge Thulin Sr VPs: Business Development & Marketing-Sales; Legal Affairs & General Counsel; HR; Financial; Supply Chain; R&D & Technology; Corporate Communications & Enterprise Services; Business Transformation & IT Executive VPs: COO & Business Groups listed below: Industrial Tapes, abrasives, adhesives, specialty materials and filtration systems Health Care Medical and oral care products, drug delivery, health information systems. Consumer Post-it, Scotch, Scotch-Brite, Filtrete, O-Cel-O, Nexcare Electronics & Energy Electronic devices, telecommunication networks, renewable energy Safety & Graphics Personal protective equipment, safety & security products, track & trace solutions International Operations
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GE Unrelated Diversification Nov 2014 Organization Chart
CEO: Jeffrey Immelt Corporate Staff: PR; Legal; HR; Finance; Global Research Global Growth & Operations Capital Appliances & Lighting Healthcare Aviation Transportation Power & Water Oil & Gas Energy Mgmt
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GE to give up rail unit in $11 billion deal. WSJ. 5/22/18
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A shrunken GE plans more unit sales. WSJ. 6/27/18
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Corporate Culture Defined
Collectively shared values and norms of an organization’s members. Values = what is considered important Norms = appropriate employee attitudes & behavior
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Functions of Corporate Culture
Conveys a sense of identity Generates employee commitment Adds to organizational stability
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