Step 3: determining the competitive value of strategic fit in diversified companies course hero12/23/2023 This analysis is done to determine the extent of matching of a unit’s resource strengths with the resource requirements of its present business lineup. If it is found that good strategic fits exist among the business units, the strategy makers can conclude that the company has a competitive advantage potential. They also examine the strategic-fit among the existing business-units.įrom this analysis, they can understand whether a unit has a valuable strategic-fit with other businesses. The strategy makers in a diversified company determine the potential for the competitive advantage of value chain relationships. Strategists usually consider such factors as relative market share, ability to compete on cost ability to negotiate with the key suppliers and customers strongly, technology and innovation capabilities, matching of unit’s competencies with industry key success factors, and profitability relative to competitors. The strategy makers need to evaluate the strength and competitive position of each business-unit under a diversified company to determine the strongest and weakest units. Step-3: Evaluating the competitive strengths of each of the business units The attractiveness of all industries as a group to determine how appealing the mix of industries is.Each industry’s attractiveness relative to the others to estimate the ranking of the industries from most attractive to least attractive and.The attractiveness of all industries relevant to the company’s businesses to determine each industry’s prospects for growth and profitability, competitive conditions and market opportunities, and the extent of matching company’s capabilities with industry’s technology/resource requirements. Such evaluation should focus on the following: The strategies must evaluate the attractiveness of each industry in which a company’s businesses are being carried on. Step-2: Evaluating the industry attractiveness For this purpose, they examine the extent of related or unrelated diversification, the scope of operations (domestic to multinational to global), moves to add new businesses, moves to divest weak/unattractive business-units, moves to boost the performance of key business-units, moves to strengthen existing business positions, the extent of cross-business strategic fit benefits, resource allocation priorities among different business-units, etc.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |