Exam (elaborations)
BUS 5117 Unit 8 Discussion Assignment
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A guide to assignment on corporate-level strategy and diversification strategy
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In this question, you will consider the corporate level strategies in chapter 8 of thetextbook. Briefly describe three of your choice and then provide a real-world example of
each not already given in the readings. Your example may come from your personal and
professional experiences or may be from research you conducted online.
A corporate-level strategy is a strategy that businesses use to achieve specific goals efficiently
(Kepka, 2021). Large corporations use these strategies to manage the operations of multiple
businesses to gain a competitive advantage. These strategies will be crucial to creating value
while managing different operating divisions of a company (Kepka, 2021). The most common
corporate-level strategies include diversification, vertical integration, and horizontal integration.
A diversification strategy is used when firms want to introduce a new product into the supply
chain to enhance profits and gain a new market segment (Kennedy, 2020). One of the ways
firms' can diversify is through unrelated diversification. This is a strategy where firms enter into
new industries to expand their revenue sources and gain new markets. Ethio telecom is a
telecommunication company founded in Addis Ababa, Ethiopia, that had a monopoly as the only
internet and telephone service provider till recently (Ethio telecom, 2022). The firm that used to
operate solely in the telecom industry has started providing financial services as part of its
diversification strategy.
A backward vertical integration strategy aims to help firms trace back along the supply chain and
make direct engagement (Kennedy, 2020). This strategy will minimize the suppliers' bargaining
power and enhances the firm's capacity to control quality and quantity easily. ASER
Construction plc. is a locally registered Grade 1 contractor that is engaged in building and road
works (ASER CONSTRUCTION, 2022).
It was established in 2009 solely as a construction firm but steadily it moved into manufacturing
construction materials like concrete pipes (ASER CONSTRUCTION, 2022). Then it moved
even back in the value chain to install a concrete batching plant to produce concrete on its own.
This allowed the firm to control the majority of the value chain, enhance quality, reduce cost,
and improve performance.
The last strategy is horizontal integration which helps a firm to diversify through a merger with
another firm of relatively equal size or through acquisitions. An acquisition involves a larger
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