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Diversification Merits Strong Consideration Whenever A Single-Business Company Nyse: Commercial Mascot With Floppy Ears

Lower advertising costs and lower customer service costs. A. selling a business outright. However, there are four other instances in which a company becomes a prime candidate for diversifying:1. Diversification merits strong consideration whenever a single-business company reported. n When it spots opportunities for expanding into industries whose technologies and/or products complement its present business. Whether to keep or divest businesses whose technological approaches do not match the overall technology and R&D strategy of the corporation. Thus, to make the best use of the available resources, top executives must steer resources to businesses with the best opportunities and performance prospects and either divest or allocate minimal resources to businesses with marginal or dim prospects—this is why ranking the performance prospects of the various businesses from best to worst is so crucial. D. sticking closely with the existing business lineup and pursuing opportunities these businesses present.

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Diversification Merits Strong Consideration Whenever A Single-Business Company Nyse

B. cash cow businesses is sufficient to fund its needs to turn into potential young stars. B. it is impractical to outsource most of the value chain activities that have to be performed in the target business/industry. C. ensure at least three companies within the industry are clearly well-understood to ensure validated scores. A. are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation. Product R&D, Engineering and Design. C. brand sharing between business units that have common customers or that draw upon common core competencies. An e-book published by McGraw-Hill Education. B. Diversification merits strong consideration whenever a single-business company A. has integrated - Brainly.com. is so profitable that it has no long-term debt. D. identify bargain-priced companies with big upside potential and then turn around their operations quickly with the aid of the parent company's financial resources and managerial know-how. Such advantages explain why such consumer products companies as Procter & Gamble, Unilever, Nestlé, Kimberly-Clark, Colgate-Palmolive, and Coca-Cola employ a strategy of multinational diversification. 2 provides sample calculations of competitive strength ratings for three businesses.

The more attractive the industries (both individually and as a group) a diversified company is in, the better its prospects for good long-term performance. Open new avenues for reducing costs. C. in sales and marketing activities only. Sometimes a company acquires businesses that, down the road, just do not work out as expected even though management has tried all it can think of to make them profitable—mistakes cannot be completely avoided because it is hard to foresee how getting into a new line of business will actually work out. Keep in mind here that the more intensely competitive an industry is, the lower the attractiveness rating for that industry. Global Top Blog for Management Theory---Management for Effectiveness, Efficiency and Excellence. C. It involves diversifying into industries having the same kinds of key success factors. 23 Honda has been very successful in building corporate-level R&D expertise in gasoline engines and transferring the resulting technological advances to its businesses in automobiles, motorcycles, outboard engines, snow blowers, lawn mowers, garden tillers, and portable power generators. Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is not one of the main strategy options that a company can pursue? —Andrew Campbell, Michael Gould, and Marcus Alexander. 40 Seasonal and cyclical influences 0. Diversification merits strong consideration whenever a single-business company. All the organizations cannot. Next, every industry is rated on each of the chosen industry attractiveness measures, using a rating scale of 1 to 10 (where a high rating signifies high attractiveness and a low rating signifies low attractiveness).

Fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own. N A multinational diversification strategy provides opportunities for sister businesses to collaborate in developing and leveraging competitively valuable resources and capabilities. Diversified companies with one or more corporate executives who have proven turnaround capabilities in rejuvenating weakly performing companies can often apply these capabilities in a relatively wide range of unrelated industries. It can move into one or two large new businesses or a greater number of small ones. Of course, this benefit of utilizing a diversified company's administrative resources and expertise to support the needs of its individual business is just as much available to corporations pursuing related diversification as to those pursuing unrelated diversification. D. Whether to form a strategic alliance with a pure dot-com enterprise. D. Diversification merits strong consideration whenever a single-business company nyse. be prepared to make an educated guess if the available information is skimpy. B. the company's growth is sluggish, and it needs the sales and profit boost that a new business can provide. D. steering corporate resources into the most attractive business units. Weighted strength ratings are calculated by multiplying the business unit's rating on each strength measure by the assigned weight. Resource fit exists when (1) each company business has adequate access to the resources it needs to be competitively successful (these resources can either be internal to its own operations or supplied by its corporate parent) and (2) the parent company has sufficient financial resources and parenting capabilities to support its entire group of businesses without spreading itself too thin. A. is usually the most attractive long-run strategy for a broadly diversified company confronted with recession, high interest rates, mounting competitive pressures in several of its businesses, and sluggish growth. Last 30 days 282 views.

Diversification Merits Strong Consideration Whenever A Single-Business Company Reported

D. businesses included in the corporate portfolio compete in fast-growing industries. C. How to draw traffic to its Web site and then convert page views into revenues. Sometimes divesting a business must be considered because market conditions in a once-attractive industry have badly deteriorated. Which one of the following is not a rationale for retaining a cash hog business in a diversified company's portfolio? In comparison to related diversification, unrelated diversification more closely approximates pure diversification of financial and business risk because the company's investments are spread over businesses whose technologies and value chain activities bear no close relationship and whose markets are largely disconnected. Attractive- ness Rating. Plus, it had the marketing clout and instant brand name credibility to persuade retailers to give Sony's PlayStation products prime shelf space and promotional support. E. cost reduction potential, customer satisfaction potential, and comparisons of annual cash flows from operations. It is less capital intensive and usually more profitable than unrelated diversification. A strategy of diversifying into unrelated businesses. D. provide benefits to managers such as high compensation and reduction in employment risk.

And buying a well-positioned company in an appealing industry often entails a high acquisition cost that makes passing the cost-of-entry test less likely. 9 The more unrelated businesses that a company has diversified into, the harder it is for corporate executives to have in-depth knowledge about each business (consider, for example, that corporations like General Electric, Samsung, 3M, Honeywell, Johnson & Johnson, and Mitsubishi have dozens of business subsidiaries making hundreds and sometimes thousands of products). N An excessive debt burden with interest costs that eat deeply into profitability. A. results in increased profit margins and bigger total profits. N Cross-business collaboration to create competitively valuable resources and capabilities. Likewise, high competitive strength is defined as a score greater than 6. A business unit's relative market share is defined as the ratio of its market share to the market share held by the largest rival firm in the industry, with market share measured in unit volume, not dollars. E. Broaden the diversification base.

A Diversified Company's. Which one of the following is not one of the elements of crafting corporate strategy for a diversified company? D. in production and distribution activities only. Are the parent company's resources and capabilities being stretched too thinly by the resource/capability requirements of one or more of its businesses?

Diversification Merits Strong Consideration Whenever A Single-Business Company

The real question is how much competitive value can be generated from whatever strategic fits exist? C. Moving first can result in a cost advantage over rivals. C. management wants to lessen the company's vulnerability to seasonal or recessionary influences. When it can leverage existing competencies and. It is particularly important that a diversified company's principal businesses be in industries with a good outlook for growth and above- average profitability. The purpose of diversification is to build shareholder value. N Too many competitively weak businesses. A globally powerful brand name enables a company to (1) get prominent space on retailers' shelves for the products of its different businesses sold under that brand, (2) win sales and market share simply on the confidence buyers place in products carrying the brand name, and (3) spend less money than lesser-known rivals for advertising. Being able to eliminate or reduce costs by performing all of the value chain activities of related sister businesses at the same location. Doing an appraisal of each business unit's strength and competitive position not only reveals its chances for success in its industry but also provides a basis for ranking the units from competitively strongest to competitively weakest and sizing up the competitive strength of all the business units as a group. EBay divested its PayPal business in 2015 by selling it to the public via an initial public offering of common stock that generated proceeds to eBay of $45 billion, about 30 times what it paid to acquire PayPal in 2002. Because the senior executives of a large diversified corporation have among them many years of experience in a variety of business settings, they are often able to provide first-rate advice and guidance to the heads of the various business subsidiaries on how to improve competitiveness and financial performance.

Business units in the least attractive industries are potential candidates for divestiture, unless they are positioned strongly enough to overcome the unattractive aspects of their industry environments or they are a strategically important component of the company's business make-up. Reward Your Curiosity. N A multinational diversification strategy provides opportunities to capture economies of scope arising from cost-saving strategic fits among related businesses. There is a decent chance of growing the business into a solid bottom-line contributor. E. the opportunity is too risky or complex for the company to pursue alone or when the company lacks some important resources or competencies and needs a partner to supply them.

It is best to be a fast follower rather than a first mover or a slow mover.

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