A diversified organisation is a collection of individual businesses which may op

Question

A diversified organisation is a collection of individual businesses which may operate in multiple industry environments. Top executives at a diversified organisation commonly devise a set of business strategies for each industry but will also go one step further and devise an organisation wide or corporate strategy to improve the performance of the entire organisation. Discuss the difference between a business level and corporate level strategy and the types of decisions that are made at each level. Use an example of a company pursing a diversified strategy to illustrate your answer.

Explanation / Answer

Difference between business strategy and corporate strategy

Diversification is business risk optimization. Conglomerate diversification may be horizontal or vertical. Example - Coca Cola and P&G.

Proctor & Gamble - Three Global Business Units

P&G is an example of a related diversification. J&J also pursues the strategy of related diversification. It captures scope economies, synergies, and, strategic fits. Conglomerates pursue unrelated diversification.

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