SINGLE BUSINESS STRATEGY

1
SINGLE BUSINESS STRATEGY

• START WITHIN THE CONFINES OF ITS DOMESTIC MARKET
• CORPORATE STRATEGY BUSINESS STRATEGY
• FOCUSING THE TOTAL ENDEAVOURS ON ONE SBA (proper
  in the growth industries, intimate knowledge of
  the business)
• NOT ABLE TO INCREASE ADDED VALUE
• LACK OF INVESTMENT OPORTUNITIES
• HIGHLY RISKY BEING LINKED TO ONE INDUSTRY

2
DOMINANT BUSINESS STRATEGY

• CHANDLERS CORPORATE GROWTH MODEL EXPLAINS IT
  CLEARLY
• CHANDLERS GROWTH MODEL PHASES
• START UP AND RESOURCE ACCUMULATION
• RATIONALIZATION OF THE RESOURCE USAGE
• EXPANSION IN NEW INDUSTRIES AND MARKETS
• ESTABLISHING A NEW ORGANIZATIONAL STRUCTURE THAT
  WILL ENABLE FUTHER EFFECTIVE RESOURCE USAGE

3
RELATED DIVERSIFICATION STRATEGY

• TO BROADEN THE PRODUCT RANGE ON NEW GROUPS OF
  PRODUCTS THAT ARE SOMEHOW LINKED TO A COMPANYS
  EXISTING ACTIVITIES BY COMONALLITY BETWEEN ONE OR
  MORE COMPONENTS OF EACH PRODUCT GROUP
• MOTIVES
• A NEED TO INVEST AN EXCESS CASH
• RESTRUCTURING
• TRANSFERING SKILLS
• SHARING RESOURCES (ECONOMY OF SCOPE)
• THREATS
• COST OF COORDINATION
• DIVERSIFICATION FOR WRONG REASONS (TO POOL RISKS,
  TO ACHIEVE GROWTH, ANTICYCLICAL EFFECTS)

4
HORIZONTAL AND VERTICAL INTEGRATION

• HORIZONTAL INTEGRATION
• MOTIVES
• SPECIALIZATION
• ECONOMY OF SCALE
• DISPERSION OF RISK
• ECONOMIC POWER
• SAFEFTY
• VERTICAL INTEGRATION
• MOTIVES
• BETTER COORDINATION OF VERTICAL PHASES
• BETTER USAGE OF INPUTS
• GETTTING RID OF INTERMEDIARIES
• IMPROVED QUALITY CONTROL
• BETTER PROTECTION OF THE PROPRIETARY TECHNOLOGY
• SYNERGIC EFFECTS

5
UNRELATED DIVERSIFICATION STRATEGY

• MODEL OF APPROPRIATE STRATEGIES

Unknown
Unrelated diversification
Area for external growth strategies
Technological factors
Area for internal growth strategies
Known
Market factors
Known Unknown