Strategic Management and Competitive Advantage: Concepts and Cases, 6th Edition by Pearson

CHAPTER 9

Corporate Diversification

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

1. 9.1 Define corporate diversification and describe five types of corporate diversification.
2. 9.2 Specify the two conditions that a corporate diversification strategy must meet to create economic value.
   1. a. Define the concept of “economies of scope” and identify nine potential economies of scope a diversi-fied firm might try to exploit.
   2. b. Identify which of these economies of scope a firm’s outside equity investors can realize on their own at low cost.
3. 9.3 Specify the circumstances under which a firm’s diversification strategy will be a source of sustained competitive advantage.
   1. a. Explain which of the economies of scope identified in this ...