Assalamualaikum w.b.t....
What I understand from this chapter, corporate strategy means start diversify more than one industry.
Strategies Diversification Option have four which is :
1) Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses.
eg : Affin Bank acquire Hwang-DBS, financial can be strong.
2) Broadening the current scope of diversification by entering additional industries.
eg : Tabung Haji not only manage people who want to make pilgrimage, but Tabung Haji have invest plantation and property.
3) Divesting some businesses and retrenching to a narrower collection of diversified businesses with better overall performance prospects.
4) Restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm's business line up.
Three test before enter into industry
- The Attractiveness Test : profits and return on investment as good or not.
Business focused- new entrance,supplier and other five forces
conclusion - industry attractiveness
2. The cost of Entry Test : cost overcoming entry barriers so great or reduce the potential for profitability.
3. The Better-Off : synergy ( 1+1=3) - more than, not making only. It provides the best company.
Intrapreneurship - everybody in company can create any idea to provide product.
Economic of Scale - the units price of goods little, produced many.
Economic of Scope - produce the same number with the low price.
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