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OBC1
CHAPTER 9 (SM)
| Question | Answer |
|---|---|
| The portfolio approach | A historical starting point for strategic analysis & choice in the MULTI-BUSINESS firms |
| Portfolio techniques | BOSTON CONSUITING GROUP (BCG) pioneered this approach to attempt to help managers balance the flow of cash resources amount their various businesses while identifying their basic strategic purpose within the overall portfolio |
| Volume business | Those that have few sources of advantage but the size is large typically the result of scale economies |
| Stalemate businesses | Few sources of advantages with most of those small |
| Specialization businesses | Many sources of advantages and find those advantages potentially sizeable |
| Limitation of portfolio approach | It doesn't address how value is being created, truly accurate measurement for matrix classification wasn't easy |
| The synergy approach: leveraging core competencies (1) | Opportunities to build value via diversification, integration, or joint venture strategies are usually found in market related, operations related, & management activitites |
| The synergy approach: leveraging core competencies (2) | Strategic analysis is concerned w/ whether or not the potential competitive advantages expected to arise from each value opportunity have materialized |
| The synergy approach: leveraging core competencies (3) | The most compelling reason companies should diversify can be found in situations where core competencies -key value- building skills- can be leveraged w/ other products or into markets that are not a part of where they were created |
| divestiture | Sale of a firm or a major component of a firm |
| Parenting framework | Sees MULTI-BUSINESS companies as creating value by influencing or parenting their business |
| 10 sources of parenting opportunities | Size & age, management, business definition, predictable errors, linkages, common capabilities, specialized expertise, external relations, major decisions, major changes |
| The patching approach | The process by which corporate executives routinely remap businesses to match rapidly changing market opportunities |
| The patching approach can | Take the form of adding, splitting, transferring, exiting, or combining chunks of businesses |
| Patching is not seen | As critical in stable, unchanging markets |
| Patching is seen | As critical when markets are turbulent and rapidly changing. Also critical to the creation of economic value in a multi-business company |
| The synergy approach 1 | Each core competency should provide a relevant competitive advantage to the intended businesses |
| The synergy approach 2 | Business in the portfolio should be related in ways that make the company core competencies beneficial |
| The synergy approach 3 | Any combination of competencies must be unique or difficult to recreate |
Created by:
nashanta
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