Asst Prof. Dr. Songporn Hansanti.


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Making Diversification Work. What organizations ought to a partnership contend in?How ought to these organizations be figured out how to together make more esteem than if they were freestanging unit?. 2. Making Diversification Work. Expansion activities must make esteem for shareholdersMergers and acquisitionsStrategic alliancesJoint venturesInternal developmentDiversification ought to make cooperative energy.
Transcripts
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Point 7 Strategy Formulation Asst Prof. Dr. Songporn Hansanti

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Making Diversification Work What organizations ought to a company contend in? By what means ought to these organizations be figured out how to mutually make more esteem than if they were freestanging unit?

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Business 1 Business 2 Making Diversification Work Diversification activities must make esteem for shareholders Mergers and acquisitions Strategic cooperations Joint endeavors Internal improvement Diversification ought to make collaboration + > 2

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Synergy Related organizations (flat connections) Sharing substantial assets Sharing immaterial assets Unrelated organizations (progressive connections) Value creation gets from corporate office Leveraging bolster exercises

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Related Diversification: Economies of Scope and Revenue Enhancement Economies of degree Cost funds from utilizing center capabilities or sharing related exercises among organizations in the enterprise Leverage or reuse key assets Favorable notoriety Expert staff Management abilities Efficient acquiring operations Existing assembling offices

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Leveraging Core Competencies Core capabilities The paste that ties existing organizations together Engine that powers new business development Collective learning in a firm How to facilitate assorted generation aptitudes How to coordinate numerous surges of advances How to showcase various items and administrations

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Three Criteria of Core Competencies Three criteria (of center skills) that prompt to the formation of significant worth and cooperative energy Different organizations in the firm should be comparable in no less than one imperative route identified with the center fitness Not fundamental that items or administrations themselves be comparative Is basic that at least one components in the esteem chain require comparative basic aptitudes Is basic that at least one components in the esteem chain require comparative basic aptitudes Brand picture is a case

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Sharing Activities Corporations can likewise accomplish collaboration by sharing unmistakable and esteem making exercises over their specialty units Common assembling offices Distribution channels Sales strengths Sharing exercises give two adjustments Cost investment funds Revenue upgrades

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Related Diversification: Market Power Two key intends to accomplish cooperative energy through market control Pooled arranging power Vertical reconciliation Government directions may limit this power

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Pooled Negotiating Power Similar organizations cooperating can have more grounded haggling position in respect to Suppliers Customers Competitors Abuse of bartering force may influence associations with clients, providers and contenders

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Vertical Integration In settling on choices connected with vertical incorporation, six issues ought to be viewed as: Are we happy with the nature of the esteem that our present providers and merchants are giving? Are there exercises in our industry esteem chain in the blink of an eye being outsourced or performed autonomously by others that are a suitable wellspring of future benefits? Is there an abnormal state of security in the interest for the association\'s items? How high is the extent of extra creation limit really consumed by existing items or by the possibilities of new and comparative produc ts?

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Vertical Integration (cont.) In settling on choices connected with vertical joining, six issues ought to be viewed as: Do we have the important capabilities to execute the vertical mix systems? Will the vertical mix activity have potential negative effects on our partners?

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Unrelated Diversification: Financial Synergies and Parenting Most advantages from disconnected expansion are picked up from vertical (various leveled) connections Parenting and rebuilding of organizations Allocate assets to enhance Profitability Cash stream Growth Appropriate HR rehearses Financial controls

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Example General Electric\'s items and administrations include: Appliances Aviation Consumer Electronics Electrical Distribution Energy Finance – Business; Consumer Healthcare Lighting Media & Entertainment Oil & Gas Plastics Rail Security Water Source: www.ge.com

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Corporate Parenting & Restructuring Corporate Parenting—making esteem inside specialty units Experience of the corporate office Support of the corporate office Corporate Restructuring Find ineffectively performing firms With undiscovered potential On edge of huge positive change

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Corporate Restructuring (Cont.) Corporate administration must Have understanding to identify underestimated organizations or organizations with high potential for change Have imperative aptitudes and assets to turn the organizations around Restructuring can include changes in Assets Capital structure Management

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Portfolio Management Key Each circle speaks to one of the company\'s specialty units Size of circle speaks to the relative size of the specialty unit as far as income

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Portfolio Management (Cont.) Creation of collaborations and shareholder esteem by portfolio administration and the corporate office Allocate assets (money cows to stars and some question marks) Expertise of corporate office in finding alluring firms to obtain Creation of collaborations and shareholder esteem by portfolio administration and the corporate office Provide budgetary assets to specialty units on ideal terms mirroring the enterprise\'s general capacity to raise stores Provide superb audit and instructing for units Provide a reason for creating key objectives and reward/assessment frameworks

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Means to Achieve Diversification Acquisitions or mergers Pooling assets of different organizations with a company\'s own asset base Joint wander Strategic collusion Internal improvement New items New markets New innovation

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Business Strategy Business Strategy Focuses on enhancing aggressive position of organization\'s items or administrations inside the particular business or market section

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Porter\'s Competitive Strategies Competitive Strategy - Low cost Differentiation Direct rivalry Focus on specialty

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Porter\'s Competitive Strategies Generic Competitive Strategies - Lower Cost system Greater efficiencies than contenders Differentiation technique Unique/unrivaled esteem, quality, highlights, benefit

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Porter\'s Competitive Strategies Competitive Advantage - Determined by Competitive Scope Breadth of the objective market

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Porter\'s Competitive Strategies Cost Leadership - Low-cost focused methodology Broad mass market Efficient-scale offices Cost decreases Cost minimization

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Porter\'s Competitive Strategies Differentiation – Broad mass market Unique item/benefit Premiums charged Less value affectability

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Porter\'s Competitive Strategies Cost-Focus – Low-cost focused procedure Focus on market fragment Niche centered Cost advantage in market section

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Cooperative Strategies

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Benefits of Strategic Alliances Potential Benefits of Strategic Alliances Ease of Market Entry Shared Risk Shared Knowledge and Expertise Synergy and Competitive Advantage

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Scope of Strategic Alliances Significant variety Comprehensive union Narrowly characterized union Degree of coordinated effort relies on essential objectives of every accomplice

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Types of Alliances Comprehensive Functional Production Marketing Financial Research and Development

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Implementation of Strategic Alliances Selection of accomplices Compatibility Nature of potential accomplice\'s items or administrations Relative safeness of the union Learning capability of the union

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Joint Management Considerations Shared administration assentions Assigned game plans Delegated courses of action

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Shared Management Agreement Partner 1 Partner 2 Both accomplices partake effectively Alliance

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Assigned Arrangement Partner 1 Partner 2 One accomplice assumes essential liability Alliance

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Delegated Arrangement Partner 1 Partner 2 Both accomplices appoint administration to the joint wander\'s officials Joint Venture

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Pitfalls of Strategic Alliances Pitfalls of Strategic Alliances Incompatibility of accomplices Access to Information Distribution of Earnings Loss of Autonomy Changing Circum-positions

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Beijing Jeep – A joint wander between American Motors Company (some portion of Daimler Chrysler) and Beijing Auto Works

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Merger & Acquisition (M&A) Technological change Efficiency of operations Globalization and more liberated exchange Changes in industry association New ventures Deregulation and control

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Merger เป็นการรวมที่ไม่จำเป็นต้องตั้งบริษัทใหม่ ซึ่งการรวมกันจะเป็นตกลงกันว่าจะเลิกบริษัทใด แล้วแต่จะตกลงกัน เช่น บริษัท สปามหาวินาศ และ บริษัท สปาเทวาบรรลัย ต่างประกอบกิจการ ได้รวมกิจการเข้าด้วยกัน เหลือเพียง บริษัท สปามหาวินาศ เพียงบริษัทเดียว ซึ่งการรวมแบบนี้อาจจะเรียกได้ว่า Acquisition ซึ่งเป็นการซื้อกิจการของบริษัทอื่น อาจซื้อเพียงทรัพย์สิน หรือทั้งทรัพย์สินและหนี้สิน ( โอนกิจการ ) หรืออาจเป็นเข้าไปซื้�

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