Corporate Strategy and Diversification Quiz

Title: Imperial College Business School Course Announcements and Corporate Strategy

• The course includes an exam on May 2nd with a revised time of 14:30-16:30.

• Coursework parts A and B are due on March 24th at 12:00.

• The consulting careers meeting will take place on March 16th from 18:00-19:00.

• The week 10 lecture will include a guest lecture from Michael Müller and a revision and exam prep session.

• Students are required to read the case "CRH plc: Optimising value through corporate strategy" before next week's lecture.

• The course assessment includes a group assignment due on March 24th, a 2-hour exam on May 2nd, and additional reading and research.

• Students are encouraged to use AI for research but must submit any AI-generated text as an appendix and formulate their own responses to questions.

• All sources must be referenced and plagiarism is not allowed.

• The same grade is given to every member of the group unless peer review is requested.

• The grading rubric for the group assignment can be found on Insendi.

• The course covers corporate strategy, vertical integration and diversification, and transaction cost theory.

• The course includes examples of companies such as Luxottica, Disney, and Zara in relation to vertical integration and outsourcing.Corporate Strategy: Vertical Integration and Diversification

• Consolidation and retrenchment are defensive strategies in which an organization focuses on its current market and products.

• Vertical integration involves expanding a firm's activities either upstream or downstream in the value chain.

• Diversification involves expanding a firm's activities into new products or markets.

• There are two types of relatedness in diversification: operational relatedness and strategic relatedness.

• The benefits of diversification include exploiting economies of scope, developing market power, and exploiting information advantages.

• The potential risks of diversification include not being in the shareholder's interest, diseconomies of scope, and cultural differences.

• There is no consistent relationship between diversified firms and specialized firms' performance.

• Related diversification tends to outperform unrelated diversification.

• The sources of strategic relatedness between businesses are resource allocation, strategy formulation, and performance management and control.

• The better-off test, industry attractiveness test, and cost of entry test are useful tools for analyzing corporate scope decisions.

• Vertical integration can be beneficial but is often costly.

• Diversification tends to be more successful when there is something "core" that a firm can leverage.