Exam 2 Selecting Corporate Level Stategies

What is the main issue concerning corporate level strategy?

What businesses should the firm be in?

• How should the corporate office manage the group of businesses?

What are the three value creating strategies of diversification?

What are the two ways corporate relatedness can create value?

Creates value in two ways:

• Eliminates resource duplication in the need to allocate resources for a second

unit to develop a competence that already exists in another unit.

• Provides intangible resources (resource intangibility) that are difficult for

competitors to understand and imitate.

What are the three managerial motives to diversify?

• Managerial risk reduction

• Desire for increased compensation

• Build personal performance reputation