faloact.blogg.se - Step 3: determining the competitive value of strategic fit in diversified companies course hero

Assessing the competitive advantage potential of cross-business strategic fit involves

the capability test, the industry attractiveness test, and the shareholder value testĦ.

the industry attractiveness test, the cost-of-entry test, and the better-off (synergy) test.

the shareholder value test, the cost-of-entry test, and the competitive advantage test.

the better-off (synergy) test, the competitive advantage test, and the cost-of-entry test.

the resource fit test, the profitability test, and the shareholder value test.

Coca-Cola's August 2018 move to acquire Costa Coffee, an international coffee chain, meant that the acquired company had to first pass which three Tests of Corporate Advantage? Attractiveness ratings identify which industry has the best/worst value chain matchups from the standpoint of cost reduction potential.ĥ.Attractiveness ratings help to identify competitively valuable resources and capabilities.from most attractive to least attractive. Calculating attractiveness ratings is a systematic and reasonably reliable method for ranking a diversified company's industries, i.e.Attractiveness ratings help to identify the ability to match or beat rivals on key product attributes.Attractiveness ratings help to identify the opportunities to exercise bargaining leverage with key suppliers or customers and help identify which industry is likely to be the largest/smallest contributor to the company's growth and profitability.What is the benefit of calculating quantitative attractiveness ratings for the industries a diversified company has invested in? Cost reductions stemming from strategic fit along the value chains of related businesses can result inĤ. limited competitive advantage potential.ģ.financial instability and very demanding managerial requirements.minimal potential for shareholder value creation and financial stability.very demanding managerial requirements and limited competitive advantage potential.

cultural conflicts and very demanding financial requirements.

The drawbacks of an unrelated diversification strategy include

has good resource fit with a cash cow business and is essential to a diversified company's lineup of businesses.Ģ.

generates cash flows exactly matching the demand for operations and growth.

generates cash flows over and above its internal requirements.

generates cash flows that are too small to fully fund its operations and growth.