Strategy and International Business - Essay Example

Hanson and Ever Ready; BTR; Tarmac.Strategic PlanningThis style is best suited to businesses that have important potential synergies between businesses, often requiring large, risky decisions and facing tough international competition. This means concentrating on one or two core businesses and divesting peripheral businesses - the fit between the businesses is critical e.g. Cadbury Schweppes; BOC; Lex; STC.Strategic ControlThis style seems to require some homogeneity between the businesses in terms of their strategic characteristics so that the centre can have a good feel and understanding for each.

However, there does not seem to be a need to concentrate upon just one business or industry, or even a closely related set of core businesses, provided that the diversity is not too great e.g. the demerger of ICI into ICI and Zeneca; Courtaulds.Source: PrimaryTable 3 - Advantages and Disadvantages of each styleStyleAdvantagesDisadvantagesFinancial Control / Portfolio ApproachQuantifiableResponsivenessLose DirectionCentre does not add valueStrategic Planning / Core competence ApproachEmpowermentGrowth on corporate as a wholeCoordinationCompetitive advantageEffectiveSBU structure tends to hinder development as competences cross organisational boundaries.

Centre out of touchDivisions tactical - by preventing other SBUs exploiting the particular competence of one SBU (e.g. transferring staff). Acquisitions criticalStrategic Control / Linkages ApproachCentre/divisions ComplementaryCost control by monitoring each activity EfficientCoordinationMotivationCompetitive advantageProblems in sharing. Each style is different in its approach, can offer different advantages to the corporation, but has different strengths and weaknesses. This style works when the businesses in the group are largely autonomous and the centre can act to improve performance in each business, often by turnaround of under-performing businesses, and ultimate disposal e.g. Hanson and Ever Ready; BTR; Tarmac.

This style is best suited to businesses that have important potential synergies between businesses, often requiring large, risky decisions and facing tough international competition. This means concentrating on one or two core businesses and divesting peripheral businesses - the fit between the businesses is critical e.g. Cadbury Schweppes; BOC; Lex; STC. This style seems to require some homogeneity between the businesses in terms of their strategic characteristics so that the centre can have a good feel and understanding for each.

However, there does not seem to be a need to concentrate upon just one business or industry, or even a closely related set of core businesses, provided that the diversity is not too great e.g. the demerger of ICI into ICI and Zeneca; Courtaulds. Portfolio/Financial Control companies are likely to develop into unrelated products/markets/processes, usually by acquisition, with the decision likely to rest on wheth