1,Corporate-Level Strategy,Michael A. Hitt R. Duane Ireland Robert E. Hoskisson,Chapter 6,2,Strategy Implementation,Chapter 11 Organizational Structure and Controls,Chapter 10 Corporate Governance,Chapter 12 Strategic Leadership,Strategy Formulation,Strategic Competitiveness Above-Average Returns,Strategic Intent Strategic Mission,Chapter 2 The External Environment,Chapter 3 The Internal Environment,The Strategic Management Process,Chapter 6 Corporate- Level Strategy,Feedback,Strategic Inputs,Strategic Actions,Strategic Outcomes,Chapter 13 Strategic Entrepreneurship,Chapter 5 Competitive Rivalry and Competitive Dynamics,Chapter 4 Business-Level Strategy,3,Two Levels of Strategy,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 - differentiation - focused low cost - focused differentiation - integrated low cost/ differentiation,2. Corporate-Level Strategy (Company-wide Strategy) How to create value for the corporation as a whole,4,Key Questions in Corporate Strategy,1. What businesses should the corporation be in? 2. How should the corporate office manage the array of business units?,Corporate Strategy is what makes the corporate whole add up to more than the sum of its business unit parts,5,Levels and Types of Diversification,Low Levels of Diversification,Single Business 95% of business from a single business unit,Dominant Business Between 70 and 95% of business from a single business unit,6,Related Constrained 70% of revenues from dominant business; all businesses share product, technological and distribution linkages,Levels and Types of Diversification,Moderate to High Levels of Diversification,7,Related Linked (Mixed) 70% of revenues from dominant business, and only limited links exist,Levels and Types of Diversification,Moderate to High Levels of Diversification,8,Levels and Types of Diversification,Unrelated 70% of revenue comes from the dominant business, and there are no common links between businesses,Very High Levels of Diversification,9,AT&T的縮小規模,AT&T曾歷經兩次分割案 1984年非自願性分割 第一次分割後持續購併成長 高估整合的優點與忽略多角化後的經營複雜性 1995年自願分割 分割前的公司旗下有 通訊事業 電腦事業 設備事業,10,電腦事業 由購併NCR開始 虧損連連,達80億 設備事業的顧客與通訊事業間的競爭衝突 美國政府放寬對通訊事業的管制 公司決定縮小經營範疇,專心於核心事業,AT&T的縮小規模,11,多角化企業的演化歷程,單一事業,整合策略,多角化策略,國際化策略,國際化策略,多角化策略,早期,後期,12,Reasons for Diversification,Reasons to Enhance Strategic Competitiveness,Economies of scope(相關多角化) Market power (相關多角化) Financial economics(不相關多角化),13,Incentives with Neutral Effects on Strategic Competitiveness,Anti-trust regulation Tax laws Low performance Uncertain future cash flows Firm risk reduction,Reasons for Diversification,14,Resources with varying effects on value creation and strategic competitiveness,Tangible resources financial resources physical assets Intangible resources tacit knowledge customer relations image and reputation,Reasons for Diversification,15,Managerial Motives (Value Reduction),Diversifying managerial employment risk Increasing managerial compensation,Reasons for Diversification,16,Value-creating Strategies of Diversification: Operational and Corporate Readiness,Corporate Relateness: Transferring Skills into Businesses Through Corporate Headquarters,Sharing: Operational Relatedness Between Businesses,17,Adding Value by Diversification,Diversification most effectively adds value by either of two mechanisms: Economies of scope: cost savings attributed to transferring the capabilities and competencies developed in one business to a new business Market power: when a firm is able to sell its products above the existing competitive level or reduce the costs of its primary and support activities below the competitive level, or both,18,Alternative Diversification Strategies,Related Diversification Strategies sharing activities transferring core competencies Unrelated Diversification Strategies efficient internal capital market allocation restructuring,19,Alternative Diversification Strategies,Related Diversification Strategies sharing activities,20,Sharing Activities:,Sharing activities often lowers costs or raises differentiation Sharing activities can lower costs if it: achieves economies of scale boosts efficiency of utilization helps move more rapidly down the Learning Curve Sharing activities can enhance potential for or reduce the cost of differentiation Must involve activities that are crucial to competitive advantage,Key Characteristics,21,Sharing Activities:,Strong sense of corporate identity Clear corporate mission that emphasizes the importance of integrating business units Incentive system that rewards more than just business unit performance,Assumptions,22,Related Diversification Strategies sharing activities,transferring core competencies,Alternative Diversification Strategies,23,Transferring Core Competencies:,Exploits interrelationships among divisions Start with value chain analysis identify ability to trans