CORPORATE
ENTITY
internally
developed
BU or
Segment
1
BU or
Segment
2
own
partly or
wholly**
own
BU or
Segment
3
Various
Shareholders,
corporate &
individual
partly
own
Various
Shareholders,*
corporate &
individual
*The 2 shareholder groups are often also be related, might be same
individuals, or same entities, or related entities, etc.
** If the corporate entity shareholding is >50% the segment is
called a subsidiary. If less, called an associate. (There is a lower limit
for that label, that differs internationally.)
BP/Shell/Exxon/Mobile/Texaco/Chevron consortium 1995
BP
Shell
$
Exxon
Mobile
Texaco
Chevron
$
$
shares
shares
Equity Consortium
Entity
$$
shares
OCTEL
This diagram is assuming that Octel was originally created by the consortium.
If not, the consortium had to steadily buy shares from the existing s/h , through brokers,
until it owned enough to have a controlling interest in Octel, or more. (KS&C)
Many ways of using model 5 CS/CA+. All aimed at KS&C
1. Each blue-box becomes the focus of attention, or subheadings in a
report, identifying the specific companies involved in each blue box or
yellow “force’.
2. Do any or all of the buyers (or other boxes) have the power to make
things difficult for your company or the industry? (e.g. bio-fuels as
substitute; or a buyer-company that might integrates backwards,
perhaps by takeover of a direct competitor, perhaps your company)
3. Can you think of a way of weakening that “threat” to your company,
such as a takeover bid for one of them (forward integration if you take a
buyer-company), or perhaps your own “internal” development of
substitute products., or proposing some sort of strategic alliance?
4. As is often the case in strategy (KS&C) , one has to give separate
thought to the position of the managers and the shareholders of the
strategic entity you are analysing. In Porter’s original work this point
was not made. In a takeover, the managers of the target entity might be
harmed, whilst the shareholders of the target will benefit (by around
30% on average). Often, the managers are also shareholders (or
options-holders), so it can be complicated. In any case, the managers
are supposed to put the existing shareholders first (i.e. fiduciary duty)
and not consider their own personal position. (Do you think this is rare
or common, in practice?)
Value-chain “activities”
(Internal processes that create knowledge (a form of capital)
Primary activities
NC STATE
GOVERNMENT
Tech &
training for
teaching
The teaching &
learning
activity
The ASU
website and
show-days
Job
Placement
Alumni
activity
R&D
Co-Production
Sales &
Marketing
Customer
Service
Logistics &
MaterialsMgmt.
HR &
Academic
Affairs
Culture &
leadership
Information
systems
=
Knowledge
(viewed as a
hybrid form
of capital )
SPORTS &
ATHLETICS?
Support activities
Strategy: seek ways of reducing costs and improving quality,
or perceived-quality at each link of the chain [i.e. the C&Q/D-arena]
LIMITATIONS
 Monopolistic tendencies
COMPENSATIONS
Direct
 Distributive-Justice
Support anti-trust, assist swarm
Indirect
 Ability to pay
 Preference vs. well-being
Healthy offerings
 Lack of Information
Indirect
 Alienation
Restorative offerings
 Externalities
Direct