Learning%20Objectives

1
Learning Objectives

• To learn the pros and cons of diversification.
• To learn how bureaucratic costs affect the
  profitability of a diversification strategy.
• To learn the pros and cons of diversification via
  acquisition and startup.

2
Increasing Profitability Through Diversification

• Transferring competencies across industries
• Leveraging competencies
• Sharing resources Economies of scope
• Using product bundling
• Managing rivalry multipoint competition
• Utilizing general organizational competencies
  Entrepreneurship, organizational design, and
  strategy

3
Types of Diversification

• Related diversification
• Unrelated diversification

4
Disadvantages and Limits of Diversification

• Changing industry - and firm-specific conditions
• Diversification for the wrong reasons
• The bureaucratic costs of diversification Number
  of businesses and coordination

5
Entry Strategy Internal New Ventures

• Attractions
• Pitfalls Scale, commercialization, and poor
  implementation
• Guidelines for success

6
Entry Strategy Acquisitions

• Attractions
• Pitfalls

7
Entry Strategy Acquisitions (cont)

• Guidelines for Successful Acquisition
• Identification and screening
• Bidding strategy
• Integration
• Learning from experience