Business Strategy & Management Principles Report - Semester Analysis

This report examines key concepts in business strategy and management principles. It begins by outlining corporate-level strategies, the roles of key personnel, and the formation of multi-business models, including considerations for target audiences. The report then delves into horizontal and vertical integration strategies, analyzing their advantages and disadvantages. Strategic outsourcing is discussed, emphasizing its benefits for companies. The report also explores diversification strategies, differentiating between related and unrelated diversification, and examining the reasons for both the implementation and failure of these strategies. Finally, it considers the advantages and disadvantages of acquisitions as a means of entering new industries. The report concludes with a comprehensive list of references.

Running head: BUSINESS STRATEGY & MANAGEMENT PRINCIPLES
BUSINESS STRATEGY & MANAGEMENT PRINCIPLES
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1BUSINESS STRATEGY & MANAGEMENT PRINCIPLES
Table of Contents
Person Making Corporate Level Strategy, Ways Adopted, Ways Multi-business model form
Strategies and Target Audience.................................................................................................2
Horizontal Integration as Strategy; Advantages and Disadvantages.........................................2
Vertical Integration as Strategy; Advantages and Disadvantages..............................................3
Strategic Outsourcing and its Benefits.......................................................................................3
Why and When Companies Diversify........................................................................................4
Related and Unrelated Diversification.......................................................................................4
Reasons for Failure of Diversification.......................................................................................4
Advantages and Disadvantages of Acquisition for Entry in Newer Industry............................4
References:.................................................................................................................................6

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Person Making Corporate Level Strategy, Ways Adopted, Ways Multi-business model
form Strategies and Target Audience
The corporate level strategy is made by the Chief Executive Officer (CEO) of an
organization who then passes down the strategic milestones to the respective business heads
of the various divisions (Wheelen et al., 2017).
The strategies are adopted by the top management keeping in mind the firm’s
objective, allocation and acquisition of the resources and coordination with the various
strategic business units for delivering optimal performance.
An organization with a multi business model will form their strategies in a manner so
that their decisions are coherent, unified and integrated and helps in defining the long term
objectives, resource allocation, plan and competitive domain. Strategies should also reflect
the strengths, weakness, opportunities and external threats along with development of
differentiating tasks and roles at all the functional levels.
They should consider their competitors target market. Also, there might be a niche
market which may still remain untargeted or develop ways in attracting the same customers
in a slightly different manner.
Horizontal Integration as Strategy; Advantages and Disadvantages
Companies should leverage horizontal integration as a strategy as it enables the
company to grow in size, enhance its product differentiation, helps in achieving economies of
scale, reduces competition and allows access to newer markets (Strauss, Ruppn & Love,
2016). Examples include, Disney and Pixar.

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Advantages of horizontal integration include increased economies of scale, increased
efficiency of capital and rationalization of staffs. Disadvantages involve problems of bigger
sizes due to expansion of the company which becomes difficult to handle.
Vertical Integration as Strategy; Advantages and Disadvantages
Companies should leverage vertical integration as a strategy for reducing or
eliminating the leverage that the suppliers or the buyers have over a firm (Madsen & Walker,
2015). A firm can thus undertake ownership of the upstream suppliers and the downstream
buyers through acquisitions or merging specific portion of the supply chain. Examples
include ExxonMobil, ConocoPhillips.
Advantages of vertical integration include increased process control, increased
competitiveness and increase in market share. The major disadvantages of vertical integration
remain in its expense.
Strategic Outsourcing and its Benefits
Strategic outsourcing refers to the strategic decision related to planning of the
organization and is based on the partnerships with the external suppliers of the goods and the
services without them being developed within organization (Machado & Cresp, 2013).
A smaller company would choose this over vertical integration for reducing cost and
ensure quick organization of business functions. However the larger companies choose it for
improving efficiency. The advantages of strategic outsourcing include expertise and
swiftness.

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Why and When Companies Diversify
Companies diversify in order to reach longer range financial goals while minimizing
the risks.
Companies diversify whenever they develop new products or have plans for
expansion into the new market. Companies also diversify for managing risks through
minimization of the potential harm caused during the economic downturns. Diversification
may also be used as growth strategy.
Related and Unrelated Diversification
The process taking place when the business expands the activities into the product
lines similar to the ones currently offered is known as related diversification (Park & Jang,
2013). Unrelated diversification refers to manufacturing diverse range of products that are
unrelated to each other. However, related diversification sounds more sensible compared to
the unrelated one because the company can not only share the assets but also the skills and
the capabilities (Kang, 2013).
Reasons for Failure of Diversification
Diversification fails when the competitors present in the new industry imitates the
moves of the company (Griffin, 2013). Moreover, diversification as a strategy moves in an
out of trend on a regular basis.
Advantages and Disadvantages of Acquisition for Entry in Newer Industry
The advantages of acquisition include speed, competencies and new resources,
financial gain, market power and reduced entry barriers. Whereas the disadvantages includes,

5BUSINESS STRATEGY & MANAGEMENT PRINCIPLES
financial fallout, hefty costs, issues of integration, unrelated diversification and distraction
from operations (De Beule, Elia & Piscitello, 2014).

6BUSINESS STRATEGY & MANAGEMENT PRINCIPLES
References:
De Beule, F., Elia, S., & Piscitello, L. (2014). Entry and access to competencies abroad:
Emerging market firms versus advanced market firms. Journal of International
Management, 20(2), 137-152.
Griffin, R. W. (2013). Fundamentals of management. Cengage Learning.
Kang, J. (2013). The relationship between corporate diversification and corporate social
performance. Strategic Management Journal, 34(1), 94-109.
Machado Guimarães, C., & Crespo de Carvalho, J. (2013). Strategic outsourcing: a lean tool
of healthcare supply chain management. Strategic Outsourcing: An International
Journal, 6(2), 138-166.
Madsen, T. L., & Walker, G. (2015). Modern competitive strategy. McGraw Hill.
Park, K., & Jang, S. S. (2013). Effects of within-industry diversification and related
diversification strategies on firm performance. International Journal of Hospitality
Management, 34, 51-60.
Strauss, S., Rupp, S., & Love, T. (Eds.). (2016). Cultures of energy: power, practices,
technologies. Routledge.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic
management and business policy. pearson.