CHAPTER 8: CORPORATE STRATEGY~DIVERSIFICATION AND THE MULTIBUSINESS COMPANY

ASSALAMUALAIKUM..

"Make winners out of every business in your company.don't carry loser."

(jack welch-former CEO, General Electric)

Today i would like to share another topic that i already learned in my strategic management class last tuesday. Every corporate entities or business have a different strategy. The objective of diversification is to increase and  build shareholder value. Enter into any new businesses can take any of three forms: acquisition, internal start up, or joint venture. Every best choice depends on the firm's resources  and capability, the industry entry barrier, the important of speed, and the relative costs.
There a two fundamental approaches to diversification which related and unrelated diversification.

Related diversification: strong foundation or base for creating shareholder value.
Unrelated diversificaton : since the specialized resources and capabilities that a leveraged in related diversification to be more valuable competitive assets than the generalized resources and capabilities underlying unrelated, which in most cases are relatively common and easier to imitate.

Business diversification becomes a consideration when :

• Spot opportunities for expanding into industries whose technologies and product complement it's present business.
• It can leverage its collection of resources and capabilities by expanding into business where these resources and capabilities are valuable competitive assets.
• Diversifying into additional businesses opens new avenues for reducing costs.
• Has a powerful and well-known brand name that can be transferred to the product of other business .

Good company strategies is consist of 6 step.

• Evaluate the long term attractiveness of the industries into which the company has diversified.
• Evaluate the relative competitive strength of each of the company's business units.
• Check for cross-business fit.
• Check whether the firm's resources fit the resources requirement of it's present business line up.
• Rank the performance prospects of the businesses from best to worst, and determined what the corporate parent's priority should be in allocating resources to its various business.
• Crafting new business strategic moves to improve overall corporate performance.                                                                            

SHARING SESSION : FOUNDER OF OSHIMA RESTAURANT

In the business field, "THERE IS NO MAGICAL TOUCH OR EASY WAYS TO SUCCESS".To be successfull an entreprenuer in future everyone should always hardworking and this field also asked a huge sacrifice .They should be strong, resilient and always positive in any time. Last tuesday we have sharing session with founder of Oshima Restaurant..

"when we ride bikers, cycling must be done constantly, if not, the bike will stop moving and we would lose fall down".

I think this phrase is suitable to explained about doing business. In my opinion there are few ways to do to succeed and survive in this field which is:

• Good planning : it is very important to plan what our company will become 5 years from now, 10 years from now. 
• Management : A good strategic management is very helpfull to the founder to manage their business. Such as like Oshima Restaurant should manage properly their resources, capital and so on.
• Evaluation : get the evaluation and comment from customer and tried to fulfill the customer needs.
• Action : Take a possible action to response.
• Business spirit : the most important element when we want to set up business. Try again,again and again when you fail..There is no word of give up in the businessman/ woman life dictionary.

CHAPTER 7: STRATEGIES FOR COMPETING IN INTERNAL MARKETS

“ENJIT-ENJIT SEMUT, SIAPA SAKIT NAIK ATAS...”


are you still remember this song??Yes!! This jingle is easily memorized because we often singing at primary school right? But how many of us know the meaning of this phrase. Each challenge is a bitter pill to swallow. Each disaster is great to be borne “Heavy eyes looking more heavier shoulder”. To nourish the plants in the garden do not the fertilizer with sugar water but stinky shit is the best fertilizer for blooming plants refresh. Man who will "winner" are those who brave soul. Excellent man is not the one who burned suffering in life, but the brilliance belongs to those who successfully bucked everything with patience and perseverance.

The above sentence is enough to explain that in order to compete the international market is complicated. It’s because the market is large and the competition is fierce. A person should be willing to sacrifice and also create a good strategic plan to control so that it runs smoothly. That’s why before enter to the foreign market several factors need to be identified which is :

•  To gain access to new customers.

•  To spread business risk across a wider market base.

• To gain access to resources and capabilities located in foreign markets.

• To exploit its core competencies.

• To achieve lower costs through economies of scale, experience, and increases purchasing power.

Figure shown the diamond of national competitive advantage 

A strong industries are made up of strong firms, the strategies of firms that expand internationally are usually grounded in one or more of these factors. The four major factors are summarized in a framework developed by michael porter.

One a company decides to expand beyond its domestic borders, it must consider the question of how to enter foreign market.There are six primary strategic options for doing so :

• Export strategies.

•  Licensing strategies.

• Franchising strategies.

•  Foreign subsidiary strategies.

• Alliance and joint venture strategies.

• The risk of strategic alliances with foreign partners.

While competing internationally there are three main strategic approaches was applied:

§  Multidomestic strategy : company varies its product offering and competitive approach from country to country in and effort to be respobility to differing buyer preferences and market conditions.
§  Global strategy : company employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brand, and coordinates its actions worldwide with strong headquarters control. It represents a think-global, act-global approach.
§  Transnational strategy-Think global,Act global : incorporates elements of both multidomestic and global strategies.

CHAPTER 6 :STRENGTHENING A COMPANY’S COMPETITIVE POSITION: STRATEGIC MOVES, TIMING, AND SCOPE OF OPERATIONS

بسم الله الرحمن الرحيم

Sometimes a company’s best strategic option is to seize the initiative, go on the attack, and the launch a strategic offensive to improve its market position. While the company choosing the best offensive initiative that exploit competitor weaknesses to give a better chance of succeeding than do those that challenge competitor strength, especially if the weaknesses represent important vulnerabilities and weak rivals can be caught by surprise with no ready defense. The best offensives which is use a company’s most powerful capabilities and resources to attack competitor or rivals in the areas where they are weakest. There are a few principle offensive strategy options include the following: 

• Better product at a lower price.
• Persuing continuos product innovation to increase market sales from other innovative rival.
• Competitors my being first to market with the next-generation.
• Strength a preemative strive to get a good position.
• Improving on good ideas of other companies
• Using hit and run.

When a new set up company involved in the business field they using a blue-ocean strategy which is offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand. A few of business member said that the first mover will get the advantages and sometime give disadvantages depend on their opinion.

“competing in the marketplace is like war, you have injuries and casualities, and the best strategy wins”.quoted : John collins-NHL executive

Principle offen

Generic Strategies Mini-Lecture