:: RAHSIA MOVIRA ::: LECTURE 9 (19 NOVEMBER 2013)

The tenth week of lecture...

Assalamualaikum w.b.t
Alhamdulillah we meet again on tuesday for learning Strategic Management. This week our beloved lecturer Dr Ummi is continuing her lecture, the topic is " Corporate Strategy : Diversification and The Multibusiness Company "

The Core Concept of this topic is :-

Creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its parts~an outcome known as synergy.

An acquisition premium is the amount by which the price offered exceeds the preacquisition market value of the target firm.

Corporate venturing (or new venture development) is the process of developing new business as an outgrowth of a firm's established business operations. It is also referred to as corporate entrepreneurship or intrapreneurship since it requires entrepreneurial-like qualities within a larger entreprise.

Transaction costs are the cost of completing a business agreement or deal of some sort, over and above the price of the deal. They can include the costs of searching for an attractive target, the costs of evaluating its worth, bargaining costs, and the costs of completing the transaction.

Strategic fit exists whenever one or more activities constituting the value chains of different business are sufficiently similar as to present opportunities for cross-business sharing or transferring of the resources and capabilities that enable these activities.

*SPECIALIZED vs GENEREALIZED RESOURCES and CAPABILITIES*
-Specialized resources and capabilities have very specific applications and their use is limited to a restricted range of industry and business types	-Generalized resources and capabilities can be widely applied can be deployed across a broad range of industry and business types
-Leveraged in related diversification	-Leveraged in unrelated and related diversification

Corporate parenting refers to the role that a diversified corporation plays in nurturing its component business through the provision of top management expertise, disciplined control, financial resources, and other types of generalized resources and capabilities such as long-term planning systems, business development skills, management development process, and incentive systems.

A diversified firm has a parenting advantage when it is more able than other firms boost the combined performance of its individual business through high-level guidance, general oversight, and other corporate-level contributions.

Restructuring refers to overhauling and streamlining the activities of a business-combining plants with excess capacity, selling off underutilized assets, reducing unnecessary expenses, and otherwise improving the productivity and profitability of the firm.

A spinoff is an independent company created when a corporate parent divests a business by distributing to its stockholders new shares in this business.

Companywide restructuring (corporate restructuring) involves making major changes in a diversified company by divesting some business and/or acquiring others, so as to put a whole new face on the company's business lineup.