Choose a diversified company from any industry in Indonesia and then answer question no 3 and either question no 1 or question no 2. (Each student should choose a different company, anyone found choose a same company in answering the same question, both submitted forum would not be graded)
1. Evaluate that particular company’s diversification strategy and compare which of five types of corporate diversification that particular company choose, then explain why did not choose the other four types of corporate diversification strategy. Does the chosen strategy enhance shareholder value? Summarize the merits and risks of unrelated diversification strategies that particular company should consider.
2. Point out the “economies of scope” that particular company have and categorize the other eight potential economies of scope from that company’s diversification strategy might try to exploit. Indicate which of the economies of scope identified are more likely to be subject to low-cost imitation and which are less likely to be subject to low-cost imitation.
3. Explain how that particular company’s management control processes-measuring divisional performance, allocating corporate capital, and transferring intermediate products-are used to help implement a corporate diversification strategy. Then, appraise the role of management compensation in helping to implement a corporate diversification strategy.
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