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Friday 29 November 2013

CHAPTER 8 : DIVERCIFICATION AND MULTIBUSINESS COMPANY.

SALAM,,,everyone , how your day recently, I guess all of you must be happy since there no lecture and tutor for this subject. But, we still have a lot of assignment that must be submit early of December.  Tired already, but still we need to finish it. It okay’s. We can do it.

For today, I would like to share my information that I get from my reading in this chapter. Firstly,what is the purpose of diversification ? .Diversification may builds shareholder value. But, the company must entry into new business that pass the attractiveness test, the cost- of – entry test and better –off test. Besides, entry into the new business there are three forms which are acquisition, internal start-up, and joint venture.
It is important for the business to have corporate parent which it helps providing high level oversight and making available other corporate resources, allocating financial resources across the business portfolio and restructuring underperforming acquisitions.
There are six steps to analysis the company diversification:
1)    Evaluate the long term attractiveness of the industries into which the firm has diversified which is include the attractiveness in its own, for others and as a group.
2)    Evaluate the competitive strength of each of the company’s business units.
 3)   Check for cross strategies fit
4)    Check whether the firm’s resources fit the resources requirement of its present business lineup.
5)    Rank the performance prospect of the business from the best to the worst and determine what the corporate parent’s priority should be in allocating resources to its various businesses.
   6)   Crafting new strategies move to improve overall corporate performance.

I think that all for this part, have a nice day everyone. May Allah bless all of you today. Jazakallah (^_^).  









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