Complete Summary of Corporate Level Strategy ( 323038-M-6) - includes exam tips!

Corporate Level Strategy
Papers:
 Week 1
o Introduction lecture & slides
 Week 2
o Zhou, Y. M. (2011). Synergy, coordination costs, and diversification choices.
Strategic Management Journal, 32(6), 624-639
o Schommer, M., Richter, A. and Karna, A. (2019) Does the diversification–firm
performance relationship change over time? A meta-analytical review. Journal of
Management Studies, 56: 270-298
 Week 3
o Stettner, U., & Lavie, D. (2014). Ambidexterity under scrutiny: Exploration and
exploitation via internal organization, alliances, and acquisitions. Strategic
Management Journal, 35(13), 1903-192
o Castañer, X., Mulotte, L., Garrette, B., and Dussauge, P. (2014). Governance mode
vs. governance fit: Performance implications of make-or-ally choices for product
innovation in the worldwide aircraft industry, 1942–2000. Strategic Management
Journal, 35(9), 1386-1397
 Week 4
o Moatti V, Ren CR, Anand J, Dussauge P (2015) Disentangling the performance
effects of efficiency and bargaining power in horizontal growth strategies: An
empirical investigation in the global retail industry Strategic Management Journal 36
(5), 745-757
o Rabier M (2017). Acquisition motives and the distribution of acquisition
performance. Strategic Management Journal 38(13): 2666-2681
 Week 5
o Chen, G., Crossland, C., & Huang, S. (2016). Female board representation and
corporate acquisition intensity. Strategic Management Journal, 37(2), 303-313
o Shi, W., Zhang, Y., & Hoskisson, R. E. (2017). Ripple effects of CEO awards:
Investigating the acquisition activities of superstar CEOs' competitors. Strategic
Management Journal, 38(10), 2080-2102
 Week 6
o Vidal, E., & Mitchell, W. (2015). Adding by subtracting: The relationship between
performance feedback and resource reconfiguration through divestitures.
Organization Science, 26(4), 1101-1118
o Feldman, E. (2014) Legacy Divestitures: Motives and Implications. Organization
Science 25(3):815-832




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,Week 1: Introduction class
What is corporate strategy?




Corporate vs. business strategy




The corporate growth trap
 ‘We must expand, we must purse size, we must grow at any costs, because if we are
bigger, we’ll be more profitable’
 There is no systematic link between the size and profitability of a multi-business firm
 Corporate growth aims at increasing corporate profits and profitability not at increasing
corporate sales ‘per se’

What is corporate strategy about?
1. Where?
2. How?
3. Why?




1. Where?

2

,  Business Development (BD)
o More of extant activities
 Horizontal expansion (HE)
o Combining extant activities with new activities
o Varying levels of relatedness
 Vertical Expansion (VE)
o Internal production of activities formerly
outsourced to specialized firms
 Forward VE: Zara: from raw materials to
stores
 Backward VE: Total: from oil distribution
to oil exploration

Backward vertical integration/expansion
 Moving up the value chain

Forward vertical integration/expansion
 Moving down the value chain:

Unrelated horizontal diversification
 E.g., from aircraft to pizza




Examples

Criteria to judge, usually 5
1. Technology the same?
2. Suppliers the same?
3. Competitors
4. Buyers
5.

Previous relationship means vertical integration
For vertical integration means that before the transaction you are supposed/could have worked with
a supplier, so you could have a market relationship

2. How?
 Build
o Greenfields
o Corporate venturing
o Internal development
o Exports

 Blend
o Alliances & JVs
o Equity sharing
o Technology partnerships

 Buy
o Mergers & acquisitions
o Technology licensing
o Franchising
The ‘corporate expansion matrix’



3

, 3. Why?




Decreased input cost
 Refers to economies from procurement, when purchasing in bulk.

Decreased production cost
 Refers to scale economies or scope economies. Offsetting fixed cost on greater volumes.

The Grand Challenge




Logics for corporate growth




Logics for Corporate Growth


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