CHAPTER 6: Corporate Strategy

This chapter examines corporate strategy, or more particularly the choices firms make to compete in multiple lines of business and/or compete in different markets or industries. Each line of business should have a strategy (as described in Chapters 1-5) but success often hinges on the selection of which businesses to have in the portfolio and the synergies between those businesses. The chapter presents eight ways diversification can add value. The chapter also discusses how managers should think about the mode of entry (Green Field vs. Acquisition), and if a firm diversifies through acquisition, how managers can determine the appropriate level of integration for the new entity.