Week 2 - Corporate strategy
Hedley:
Author Hedley (1977)
Title Strategy and the “Business Portfolio”
Strategy objectives must vary between businesses. The strategy
developed for each BU must fit into its matrix position and the needs
and capabilities of the company overall portfolio of businesses.
Relative competitive position and growth are the two fundamental
Main concept
parameters to consider in determining strategy.
Corporate strategy helps manage risks through acquisitions and
management of the cash flows between units.
Growth share matrix. Business portfolio.
Growth share matrix: divides BUs into four categories (Stars, Question
Marks, Cash Cows, Dogs) based on how they are placed in the market
in terms of growth and relative competitive position
Business portfolio: risk reduction strategy. Multi-business companies
Important
analyse each business unit based on growth rate and relative
constructs
competitive position to create “a balance in the portfolio such that the
cash generated by the cash cows is sufficient to support the company’s
stars and to fund the selected question marks through to dominance”
some question marks and dogs are liquidated.
Strategy helps risk management; it happens at corporate level with
Approach to acquisitions to create a portfolio of businesses. Strategy is managing
strategy cash flow between the business units, deciding where to invest and what
BU to foster/drop. Strategy is making a business portfolio work.
Hedley:
Author Hedley (1977)
Title Strategy and the “Business Portfolio”
Strategy objectives must vary between businesses. The strategy
developed for each BU must fit into its matrix position and the needs
and capabilities of the company overall portfolio of businesses.
Relative competitive position and growth are the two fundamental
Main concept
parameters to consider in determining strategy.
Corporate strategy helps manage risks through acquisitions and
management of the cash flows between units.
Growth share matrix. Business portfolio.
Growth share matrix: divides BUs into four categories (Stars, Question
Marks, Cash Cows, Dogs) based on how they are placed in the market
in terms of growth and relative competitive position
Business portfolio: risk reduction strategy. Multi-business companies
Important
analyse each business unit based on growth rate and relative
constructs
competitive position to create “a balance in the portfolio such that the
cash generated by the cash cows is sufficient to support the company’s
stars and to fund the selected question marks through to dominance”
some question marks and dogs are liquidated.
Strategy helps risk management; it happens at corporate level with
Approach to acquisitions to create a portfolio of businesses. Strategy is managing
strategy cash flow between the business units, deciding where to invest and what
BU to foster/drop. Strategy is making a business portfolio work.
