Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Chapter 6
6
Corporate-Level Strategy
Michael
Michael A.
A. Hitt
Hitt
R.
R. Duane
Duane Ireland
Ireland
Robert
Robert E.
E. Hoskisson
Hoskisson
Strategic
Competitiveness
Above Average
Feedback
Returns
Ch6
A Diversified Company
Has Two Levels of Strategy
1. Business-Level Strategy (Competitive Strategy)
How to create competitive advantage in each
business in which the company competes
- low cost - focused low cost
- differentiation - focused differentiation
- integrated low cost/differentiation
Managerial
Motives
Ch6
Motives, Incentives, and Resources
for Diversification
Ch6
Motives, Incentives, and Resources
for Diversification
Resources
Incentives
Managerial Motives
Causing Value Reduction
Managerial Diversifying Managerial
Motives Employment Risk
Increasing Managerial
Compensation
Ch6
Summary Model of the
Relationship Between Firm
Performance and Diversification
Resources
Diversification
Incentives Strategy
Managerial
Motives
Ch6
Adding Value by Diversification
Diversification most effectively adds value
by either of two mechanisms:
Ch6-
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Transferring Core Competencies
Assumptions:
Transferring Core Competencies leads to competitive
advantage only if the similarities among business units
meet the following conditions:
Sharing Activities
Transferring Core Competencies
Ch6-
Alternative Diversification Strategies
Sharing Activities
Transferring Core Competencies
Ch6-
Incentives to Diversify
External Incentives:
Relaxation of Anti-Trust regulation allows more
related acquisitions than in the past
Before 1986, higher taxes on dividends favored
spending retained earnings on acquisitions
After 1986, firms made fewer acquisitions with
retained earnings, shifting to the use of debt to take
advantage of tax deductible interest payments
Internal Incentives:
Poor performance may lead some firms to
diversify to attempt to achieve better returns
Ch6-
Value-creating Strategies of Diversification
Operational and Corporate Relatedness
Related Constrained Both Operational and
High Diversification Corporate Relatedness
(Rare Capability and
Sharing: Vertical Integration Can Create Diseconomies
Operational (Market Power) of Scope)
Relatedness
Between
Business
Unrelated Related Linked
Diversification Diversification
Low (Financial Economies) (Economies of Scope)
Low High
Corporate Relatedness: Transferring Skills Into
Business Through Corporate Headquarters Ch6-
Performance Diversification and Firm Performance
Managerial
Motives
Internal Strategy
Governance Implementation
Ch6-