Article about corporate strategy business Essay Example
This article is about Cooley Group Inc., a commercial printer. The company has employed an unrelated business kind of diversification in its program over the past 50 years. Formerly the company offered only four products, namely, printing, promotional products, branding wear and specialty labeling. Presently it has now diverted into unrelated business. Besides, they offer consultation services, support in client and business branding awareness, and promotion services, In addition, the article illustrates that the company has also divested into direct emails and electronic products and services. Clearly, we can see diversification from a printing company to a promotional market. Further, the article talks about what to consider in order to divest. The reasons cited are managing risks, the cost of foregoing so as to divest, and finally the industry attractiveness. The company should not just divest to grow. However, they should take advantage of opportunities promoted by the industry for future success (Spicer).
How it fits with Chapter 8
The article fits in with Thompson, Peteraf, Gamble, and Strickland’s illustration on what to consider before a company divests. According to the two documents a firm intending to divest must consider costs that might be reduced through cross –business or resource transfer, also divesting into the right fit or businesses that complement their resources and technologies, and finally the company needs to manage its risks through valuing competitive assets if they want to effectively diversify that is to say it should manage risks associated with diversification.
The article also compares to our chapter 8 in terms of what path to choose in order to divest. Both documents note that there are three ways to go. That is a firm can divest into related business, unrelated business or a firm can combine both. Whichever method the company chooses it should match their capabilities and complement its resources.
Spicer, Velvet. “Diversification builds bottom line, stimulates growth.” Rochester Business Journal. 20 Mar. 2015. http://www.rbj.net/article.asp?aID=213481 Accessed 17 Oct. 2016.
Thompson, Arthur, Margaret Peteraf, John Gamble, and A. J. Strickland III. Corporate Strategy: Diversification and The Multibusiness Company. In Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases 19th Edition.
McGraw-Hill Education, 2013. [PowePoint Slides].
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