AIR UNIVERSITY
HOME ASSIGNMENT
EXHIBIT 6.1
STRATEGIC MANAGMENT
Submitted By: Arsalan Waseem Dar (080615) BBA-8A
Dated: February19, 2012
EXHIBIT
6.1
S# 1.
CONTENTS Related Diversification: Economies of Scope Leveraging Core Competencies
EXAMPLES
DEFINITION: It is the collective learning in organizations that how to coordinate production skills; integrate multiple streams of technology, and market and merchandize products and services. Sharing Activities
PROCTER & GAMBLE: The corporation leverages its distinctive capabilities of understanding the several phenomenon of shaving that enhances its value. Its R&D combines different facets of its capabilities to create synergies that result in different related products.
FAUJI CEMENTS COMPANY LIMITED (FCCL): DEFINITION: It is the sharing of tangible The cement and fertilizer producing company activities that includes value creating activities enhances its clinker capacity by establishing such as common manufacturing facilities, new plants which results in reducing the soaring coal cost margins and production distribution channel and sales forces. costs. Its last newly opened plant increases clinker capacity from 1.1 billion tons to an astounding 2.22 billion tons. 2. Related Diversification: Market Power Pooled Negotiating Power NESTLE PAKISTAN: A leading Food and Beverage Company has a strong bargaining position in relation to its suppliers because of its mass purchases from them. The company entered into an unprecedented partnership with local farmers that enhances its bargaining position
DEFINITION: Similar businesses working together or the affiliation of a business with strong parent that strengthens a firms bargaining position in relation to its suppliers and customers and against competitors too. Vertical Integration
PAKISTAN TOBACCO COMPANY (PTC): A tobacco processing and cigarettes DEFINITION: Its the expansion or extension of manufacturing company. The company has a the firm by integrating preceding (Backward control over its inputs i.e. raw materials by integration) or successive (Forward integration) cultivating the tobacco plants in its own farms in the northern areas. (Backward Integration) productive processes.
S# 3.
CONTENTS Unrelated Diversification: Parenting, Restructuring, & Financial Synergies Corporate Restructuring & Parenting
EXAMPLES
DEFINITION: Restructuring is to detect and purchase the undervalue companies or businesses competing in industries with a high potential for transformation then adds value to it then sells it or retain it for future profitability. Parenting includes providing managerial, technical, HRM, financial assistance to different business units. Portfolio Management
MANSHA GROUP OF COMPANIES: The Corporation aids its different business units by providing technical, managerial, and financial assistance thus adding value to its different businesses. Some of those business units include Muslim Commercial Bank (MCB), Nishat textile Mills (NTM), Nishat Power Limited (NPL).
DEFINITION: Its an approach to achieve a better understanding of the competitive position of an overall portfolio of business to determine strategic alliances for each of the business and to identify priorities for allocation of resources.
PEPSI COLA INTERNATIONAL (PCI LAHORE): The Corporate head office of Pepsi located in Lahore uses Portfolio management to assess its strategic business units (SBUs) in order to assign resources to that unit that requires it and extracting resources from that unit that are enough or even above with it. Pizza hut and Lays are two of its SBUs.