Week 6 Assignment
To access to Week 6 Virtual session, go to Blackboard Collaborate and watch it from there.
Read chapter 8 “Corporate Strategy: Diversification and the multibusiness company”. Chapter 8 moves up one level in the strategy-making hierarchy, from strategy making in a single business enterprise to strategy making in a diversified enterprise. The chapter begins with a description of the various paths through which a company can become diversified and provides an explanation of how a company can use diversification to create or compound a competitive advantage for its business units. The chapter also examines the techniques and procedures for assessing the strategic attractiveness of a diversified company’s business portfolio and surveys the strategic options open to already-diversified companies.
Also, as supplemental material, read case 16 (from your textbook) “Sara Lee Corp. in 2011: Has Its Retrenchment Strategy Benefited Shareholders?”. Attached find the comments of the case based on its questions. Study the answers carefully to get deeper insights regarding diversification.
1.1. Using your university library’s subscription* to Lexis-Nexis, EBSCO, ceoexpress.com, or a similar database, perform a search on “acquisition strategy.” Identify at least two companies in different industries that are using acquisitions to strengthen their market positions. How have these acquisitions enhanced the acquiring companies’ competitive capabilities?
*Find FNU electronic database as indicated in the week 3 assignment: If no information is found there, then google it, or use an alternative source as mentioned in the exercise instruction. Do not forget to cite any sources of information used to perform your exercise. To log into FNU electronic database, do the following: www.fnu.edu/academic/library/LRIN/Type: Florida National University/username: 24439/password: smartlearn39/business/Proquest database.
1.2. Go to (www.google.com), and do a search on “outsourcing.” Identify at least two companies in different industries that have entered into outsourcing agreements with firms with specialized services. In addition, describe what value chain activities the companies have chosen to outsource. Do any of these outsourcing agreements seem likely to threaten any of the companies’ competitive capabilities? Are companies using strategic alliances to manage their outsourcing? Note: The following companies should not be considered for this answer: IBM, Grupo Gigante (Mexico), NCR Corporation, and Co-op Financial Services.
1.3. See attached exercises. Open and answer them after studying diversification.
1.4. ITT is a technology-oriented engineering and manufacturing company with the following business division and products:
1. Industrial process Division-industrial pumps, valves, and monitoring and control systems; aftermarket services for the chemical, oil, and gas, mining, pulp and paper, power, and biopharmaceutical markets.
2. Motion Technologies Division-durable brake pads, shock absorbers, and damping technologies for the automotive and rail markets.
3. Interconnect Solutions-connectors and fittings for the production of automobiles, aircraft, railcars and locomotives, oil field equipment, medical equipment, and industrial equipment.
4. Control Technologies-energy absorption and vibration dampening equipment, transducers and regulators, and motion controls used in the production of robotics, medical equipment, automobiles, subsea equipment, industrial equipment, aircraft, and military vehicles.
Based on the previous listing, would you say that ITT’s business lineup reflects a strategy of related diversification, unrelated diversification, or a combination of related and unrelated diversification?. What benefits are generated from any strategic fit existing between ITT’s businesses? Also, what type of companies should ITT consider acquiring that might improve shareholder value? Justify your answer.
1. APA written report based on questions from activity 1 (exercises)
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