The Theory Why and When Companies Should Diversify Christine Porter Financial Management Dr. Morrison February 24, 2015 What is Diversification? It’s a technique that reduces risk by allocating investments among various financial instruments, industries and other categories. It aims to maximize return by investing in different areas that would each react differently to the same event. Although diversification does not guarantee
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Spain. She has taught Business Ethics at the University Pompeu Fabra, Barcelona, for the International Education of Students (IES), a consortium comprised of more than 120 leading US colleges and universities. Her current research focuses on the concept and implementation of Corporate Social Responsibilities. She also has interest in organizational learning, entrepreneurship and innovation. ` ´ Domenec Mele is Professor and Director of the Department of Business Ethics at IESE Business School, University
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(Actual) 3. External Audit: 6 i. The Five-Forces Model of Competition 7 ii. Competitive Profile Matrix (CPM) 10 iii. External Factor Evaluation Matrix (EFE) 11 iv. BCG Matrix 12 4. Internal Audit: 15 a) Financial Ratio Analysis 15 b) Internal Factor Evaluation Matrix (IFE) 18 5. SWOT Analysis 19 6. SPACE Matrix 21
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Section B: Strategic Management (50 Marks) Objectives: (a) To develop an understanding of the general and competitive business environment, (b) To develop an understanding of strategic management concepts and techniques, (c) To be able to solve simple cases. Contents 1. Business Environment General Environment–Demographic, Socio-cultural, Macro-economic, Legal/political, Technological, and Global; Competitive Environment. 2. Business Policies and Strategic Management Meaning and nature;
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price wars are factors that can have a negative affect on profits. Political | Economic | Socia-cultural | Technological | Environmentalweather, climate, and climate change, | Competition | Legal:Although its central functions are based in Sweden p.5; H&M follows the Swedish legislation& the Swedish Company Act
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.............................................................................................. 5 SITUATIONAL ANALYSIS .............................................................................................................................. 6 INDUSTRY COMPETITIVE ANALYSIS ........................................................................................................ 7 PORTER’S FIVE FORCES MODEL .........................................................................................
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pursue resourcesubstitution policies, thereby modifying production possibilities. During the period after the second world war, at least through the 1980s, Japan and Japanese firms seemed to have successfully adapted themselves to the competitive forces of emerging global markets. In spite of a poor natural resource base, a dramatically altered set of institutional arrangements (a combination of democratic government, free-markets and the rule of law) created a propitious atmosphere for innovative
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same environment, yet Tesco is a superior performer. It is not the environment that distinguishes between them but their internal strategic capabilities. The importance of strategic capability is the focus of this chapter. There are three key concepts that underpin the discussion. The first is that organisations are not identical, but have different capabilities; they are ‘heterogeneous’ in this respect. The second is that it can be difficult for one organisation to obtain or copy the capabilities
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Resource Based View A question summarizing RBV approach. Definition The resource-based view (RBV) is a model that sees resources as key to superior firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and sustain competitive advantage.[1] What is a resource based view? RBV is an approach to achievingcompetitive advantage that emerged in 1980s and 1990s, after the major works published by Wernerfelt, B. (“The Resource-Based View of the Firm”), Prahalad
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said that the Boston Tea Party was the beginning of not one but two major revolutions in America. The first was the revolt of the colonists against England, and the second was coffee’s dominance as the beverage of choice for patriotic colonists. 5 Throughout the history of America, coffee has played an important role within the context of a beverage. During the Civil War, coffee was a staple of the Union soldiers’ diets with an allocation of 36 pounds of beans a year for every soldier. By
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