Chapter 8 : Corporate Strategy

Assalamualaikum

This week I learn about corporate strategy. Corporate strategy is one company diversifies more than one industry while business strategy is one company focus in one industry.  Basically, corporate level strategy means the management level will develop the strategy by top level manager. Synergy means is more than that not to make it strong, but it provide the best for the company.

  

 

All the diversification process will involve transaction cost. It is because Transaction costs are the costs of completing a business agreement or deal of some sort, over and above the price of the deal.

There aye two types to choosing the diversification path which are related business and unrelated businesses. Related business has competitively valuable cross-business value chain and resource matchups such as L’Oreal. L’Oreal has many product which is cosmetic, hair care and skin care. The entire product is about personal care. So, the L’Oreal is a one of the related business.

   

While, unrelated business is Have dissimilar value chains and resource requirements, with no competitively important cross-business relationships at the value chain level such as Tabung Haji. Tabung Haji started with services for pilgrims, then plantation, then marine and nowadays TH will produce food. So, all the industry is unrelated business.

Identifying cross-business strategic fits along the value chain have six types of potential cross business fits which are supply chain activities such as Dell. Dell produce computer. So, all supplier of Dell is component to make a computer but what Dell do is Dell expand product to LCD TV.

Another types are R&D and technology activities such as Unify. Unify have a technology for wifi and internet. Nowadays, Unify combine with cable TV that can access internet through TV. So, use technology to come out with a good product for customer. 

 Spinoff is a gain more profit because it is under own management such as UKM Holdings. It under UKM and the profit very high because more of the product is commercialization. USIM Tijarah have own shareholder and own management but it must improve to be a spinoff. However, if USIM Tijarah really wants to market our innovation in the future, Insha’Allah it can bid on other establishes university.

thank you miss ummi..