战略管理(第七章)

4% 3% 10% US Europe Pacific Basin 23% 60% Americas Other international
14%
4
DIVERSIFICATION PROFILES (Continued)
3M Product Scope
9% 21% 9% Industrial Health Care
Also, how do we create synergies between our businesses?
3
DIVERSIFICATION PROFILES
GE Product Scope
Insurance
GE Geographic Scope
Commercial Finance Power Systems
Product extensions/ new product lines
Few related product lines
2
THREE CORPORATE STRATEGY DECISIONS THAT ARISE WHEN MAKING ENTRY/EXIT DECISIONS
In which business arenas should a company compete? Which vehicles should it use to enter/exit a business? What underlining economic logic makes it sensible to compete in multiple businesses?
7
A BRIEF HISTORY AND GENEOLOGY OF A CONGLOMERATE :ITT
1980: fluid control industry 1940: Electronics businesses 1925: telecom equipment mfr. 1979: Begins selling 250 business units, including all telecom businesses
1
DIVERSIFICATION
Company
Diversification process Types of businesses
Heavy reliance on acquisition
Many seemingly unrelated businesses
Primarily organic
Many businesses clustered in a few related industries
15
FORMS AND SCOPE OF DIVERSIFICATION
Geographic
Wal-Mart expanded into Europe
Horizontal • From one market segment to another • From one industry to another
ROA TSR
13
OPPORTUNUTIES TO EXPLOIT POTENTIAL ECONOMIES OF SCOPE
Fit among parentsubsidiary resources
Fit of parentsubsidiary dominant logic
14
OTHER REASONS TO DIVERSIFY
larger, more predictable cash flows
Share distribution to reduce
average distribution costs
10
DIVERSIFICATION DOES NOT NECESSARILY CREATE VALUE
Value generating Revenue
Coke and Pepsi expanded into water
Vertical
Pulte Homes Inc. created Pulte Mortgage LLC)
16
PROFIT POOLS
THE U.S. AUTO INDUSTRY’S PROFIT POOL
25%
The automotive industry encompasses many value-chain activities. The way that profits and revenues are distributed among these activities varies greatly. The most profitable areas of the car business are not the ones that generate the biggest revenues.
Chapter 7
Developing Corporate Strategy
OBJECTIVES
Define corporate strategy Understand the roles of economies of scope and revenue-enhancement synergy in corporate strategy Explain the different forms of diversification Understand when it makes sense for a firm to own a particular business Describe the relationship between corporate strategy and competitive advantage Explain the corporate strategy implications of the stable and dynamic perspectives
• In 2002, decided to split the
company apart
12
DIVERSIFICATION IS DIFFICULT TO MANAGE
Diversification and Performance in S&P 500 and S&P MidCap Firms (1992-2000)
1968: Buys Continental Bakery (Hostess)
Sold in 1984 to Interstate Bakery
8
MUST DETERMINE VALUE CREATION
Geographic diversification Does this create value? • Economies of scope? • Revenueenhancement opportunities?
7% 6% 5% 50% 45% 40% 35% 30% 25% 3% 2% 1% 0% Low (25 %tile) Moderate (50th %tile) High (75th %tile) Level of Diversification 20% 15% 10% 5% 0%
ROA
4%
Total Shareholder Returns
7% 4% 5% Aircraft Engines 6% Medical Systems 6% 14% 7% Industrial Products and Systems Consumer Products 8% 9% Plastics Various other (<4% individually) NBC 20% Consumer Finance
9%
3M Geographic Scope
US
Display & Graphics
25%
40%
Asia/Pacific Europe & Middle East Latin America, Africa & Canada
11%
Consumer & Office Safety & Protection 19% 14% Electro & Communications T ransportation 17%
Horizontal diversification
Vertical diversification
9
SOURCES OF VALUE FROM DIVERSIFICATION/EXPANSION
Economies of scope
Revenue-enhancement synergies
Lower price of a common
resource by combining purchases
Bundle products to appeal
to new customers
Share manufacturing capacity
to reduce average costs
Cross sell to existing customers Achieve higher valuation from
1969: Buys Hartford Insurance
1995: ITT Hartford (financial services) Now Hartford Financial Services
1968: Buys Sheraton Hotels 1995: ITT Corporation (hospitality, entertainment, IT services) Now part of Starwood Hotel & Resorts
U.S. International
86%
85%
6
INTEGRATION
Examples • General motors began operating steel plants
• Dupont moved from gunpowder making
onto dynamite, nitro-glycerine, guncotton, and smokeless power
Non-value generating
• Revenue
enhancement
• No cross-sell
opportunities
Profit
Value Valuation of profit
Costs
• Economic of
scope
• Dis-economies of
scope
• Investor-perceived
1995: ITT Industries (auto, defense & electric systems, & fluid-control) The Surviving ITT
1920 International Telephone and Telegraph
1960 Enters auto parts industry
Risk reduction
More efficient for investors to diversify themselves
Empire building
Rarely results in higher shareholder value or margins
Compensation
Acquisition motivated by executive pay - a bigger company usually implies a bigger pay check -rarely creates value
26%Fra Baidu bibliotek
5
DIVERSIFICATION PROFILES (Continued)
MITY Enterprises Product Scope
14%
MITY Enterprises Geographic Scope
15%
Multipurpose room furniture Healthcare seating
“quality”
• No perceived
value logic
11
EXAMPLE OF POOR ECONOMIC LOGIC
• In 1990s, Diversified from longdistance telephone services into wireless cell phone service and cable TV