Chapter 09 – Multibusiness Strategy
9-1
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a webs ite, in
whole or part.
Questions for Discussion
1. How does strategic analysis at the corporate level differ from strategic analysis at the
business unit level? How are they related?
Strategic analysis at the corporate level centers on domain choice. The key question
addressed is: What businesses should we be in that would maximize value to our
2. When would multibusiness companies find the portfolio approach to strategic analysis and
choice useful?
For companies that compete in multiple industries, resource allocation is a major concern.
They are constantly faced with the question of allocating limited resources to various
3. What are three types of opportunities for sharing that form a sound basis for diversification
or vertical integration? Give an example of each from companies you have read about.
Opportunities for sharing are usually found in
market-related
Honda’s diversification into off-road vehicles from their base of motor cycles and
Chapter 09 – Multibusiness Strategy
9-2
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a webs ite, in
whole or part.
4. Describe three types of opportunities through which a corporate parent could add value
beyond the sum of its separate businesses.
Size and age provide one parenting opportunity. Old, large successful businesses frequently
engender entrenched bureaucracies and overhead structures that are hard to dismantle from
Management is the second area to look for a parenting opportunity. The parent can ensure
that the business attracts and retains talented managers.
business unit.
5. What does “patching” refer to? Describe and illustrate two rules that might guide managers
to build value in their businesses.
Exhibit 9.10 summarizes the simple rules that form the core of the patching approach. One