• Demonstrate when and how business diversification can enhance shareholder value.
• Explain how related diversification strategies can produce cross-business strategic fits capable of delivering competitive advantage.
• Analyze the merits and risks of corporate strategies keyed to unrelated diversification.
• Apply the analytical tools for evaluating a company’s diversification strategy.
• Evaluate a company’s five main corporate strategy options after it has diversified.
Reading
Chapter 8 of the text book
Review the PowerPoint for Chapter 8.
Assignments
The following Assignment Questions should be completed and Submit your responses to these questions in one WORD document. List the question first, and then your response. Your response must adequately cover the question without being wordy or relying on “yes” or “no” responses. USE STYLE APA FORMAT 7TH EDITION
1. Describe the restructuring strategy which improved performance at Hewlett-Packard.
2. Identify and briefly discuss each of the three tests for determining whether diversification into a new business is likely to build shareholder value.
3. Briefly explain what is meant my each of the following terms:
a. relative market share
b. resource fit
c. a cash hog business
d. a cash cow business
4. A strategy of multinational diversification contains more built-in competitive advantage potential (above and beyond what is achievable through a particular business’s own competitive strategy) than any other diversification strategy. True or false? Explain and support your answer.
5. Which is the better approach to diversification—a strategy of related diversification or a strategy of unrelated diversification? Explain and support your answer.
6. Under what circumstances might an already diversified company choose to pursue corporate restructuring?
7. Peruse the business group listings for Ingersoll Rand listed at its website https://company.ingersollrand.com. How would you characterize the company’s corporate strategy? Related diversification, unrelated diversification, or a combination related-unrelated diversification strategy? Explain your answer.
Review Illustration Capsule 8.1 – The Kraft-Heinz Merger: Pursuing the Benefits of CrossBusiness Strategic Fit on page 229. Was the merger between Kraft Foods and Heinz successful? Why or why not?
