For this entry, i would like to share about the topic that i have learned today. Its about the corporate strategy in chapter 8. First of all, lets recap what is the corporate strategy. Basically, company use corporate strategy when its related or unrelated business in order to sustain in the market. Then, the top management level is normally plan for their corporate level strategies.
In this chapter, we have learned about several step in diversification strategy.
Other than that, there are also options for this strategic diversification.
- Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses. For example, Sime Darby. There are having many sub business unit like plantation and also produce product for end customer.
- Broadening the current scope of diversification by entering additional industries. We can take example from UMW Holding. They are having four core business like heavy equipment, oil and gas drilling services, automotive assembly and distribution and automotive component and lubricant.
- Divesting some businesses and retrenching to a narrower collection of diversified businesses with better overall performance prospects. We can see Air Asia company. Air Asia have narrow their business scope or unit nowadays. Other than they provide flight, they are have football team, hotel and so on.
- Restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm’s business lineup. For example is Malaysian Airlines Holding Berhad. Before this, they also have their flight catering. But, when they are having lost, so they appoint another company to manage the food for their passenger and they can only focus for they flight.
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