Strategic Management
Corporate Level Strategy
Prof. E.Vatchkova
Contents
1. Corporate Parent
2. Four Key Questions of Corporate
Strategy
3. Value-adding corporate parent
4. Value-destruction corporate parent
5. Definitions
6. Growth Share Matrix
7. Other Matrixes
8. Diversification
Corporate Parent
Levels of management above the business units
without direct interaction with buyers
Corporate parent
centre
centre
businesses businesses businesses businesses businesses businesses
Four Key Questions of
Corporate Strategy
Is the corporate control style appropriate?
What is the logic of the portfolio?
What is the nature and extend of diversification?
What is the strategic role of the corporate center?
Value-adding corporate parent
•
•
•
•
•
•
Beneficial control on business
Better resource allocation
Ready access to internal information
Real-time decision making
Standards/performance assessment
Expertise
Value-destruction corporate
parent
• Business better off on their own
mechanisms
• Adds cost
• Creates bureaucratic fog
• Delays decisions
• Buffers business from investment
realities
Definitions
1. Portfolio manager- identify and acquire
under-valued assets and improve them
2. Restructures- identifying restructuring
opportunities in businesses
3. Synergy- two or more activities or
processes complement each other to the
extend that their combined effect is greater
then the sum of the parts
Growth Share Matrix
Market share
High
Low
High
Stars
Question
Marks
Low
Cash Cows
Dogs
Market
Growth
Other Matrixes
Public sector portfolio matrix
Market attractiveness/SBU strength
matrix
Directional policy matrix
Parenting matrix
Relatedness matrix
Diversification
Away from current markets or products
Related diversification- development beyond current
products or markets but within the value system or
industry
Vertical integration- backward or forward integration
into adjacent activities in the value system
Horizontal integration- development into activities
which are competitive with or complementary to the
present activities
Unrelated diversification- organization moving
beyond its current value system or industry
THANK YOU !