Creating Value through Diversification

Chapter 6. Corporate-Level Strategy: Creating Value through Diversification

Overview:

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This chapter expands on the discussion of strategy to focus on corporate-level strategy and how to create value through diversification. While diversification should create value for a corporation’s shareholders and enable synergy, this chapter discusses the reasons why diversification efforts may fail. However, corporations can achieve success through utilizing unrelated diversification to attain synergistic benefits through restructuring, parenting, and portfolio analysis. Diversification can be achieved through a variety of means, including, mergers and acquisitions, joint ventures/strategic alliances, and internal development.

Chapter 6. Corporate-Level Strategy: Creating Value through Diversification

 

Learning Objectives

  1. The reasons for the failure of many diversification efforts.
  2. How managers can create value through diversification initiatives.
  3. How corporations can use related diversification to achieve synergistic benefits through economies of scope and market power.
  4. How corporations can use unrelated diversification to attain synergistic benefits through corporate restructuring, parenting, and portfolio analysis.
  5. The various means of engaging in diversification – mergers and acquisitions, joint ventures/strategic alliances, and internal development.
  6. Managerial behaviors that can erode the creation of value.

    Question

    Also, provide a graduate-level response to each of the following questions:

    1. What were some of the largest mergers and acquisitions over the past two years? What was the rationale for these actions? Do you think they will be successful? Explain.

    [Your initial post should be at least 450+ words and in APA format (including Times New Roman with font size 12 and double spaced).

 

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