Reference no: EM13845869

Advise for Diversification Strategy

If you're proposing new products/services and/or new markets (new segments or geographical territories), it is EXTREMELY IMPORTANT to present your case effectively so that the Examiner does not think that you have unknowingly engaged in corporate level strategy.
Going into new products/services or new markets is generally considered as a corporate level strategy by textbook authors (at least those that I've come across). See JWS, Ch 7, Ansoff's matrix for example. However, if argued properly, CLOSELY RELATED diversification can be a business level strategy. If this is reasoned properly, it will earn you praise (and high marks) from the Examiner. If it is done badly it ,will lead the Examiner to think that you do not understand the difference between corporate and business level strategy. These are the points you must include in your argument:

As in all suggested strategy presentation, start by describing the mechanics or features of your strategy. Basically, what does your strategy entails? In your case, the key feature, among others that you have in mind, is new product/services or new markets or both (see Ansoff's matrix). In fact you should reference Ansoff's matrix. Per Ansoff's matrix, describe your strategy as related diversification. However, it is worthwhile mentioning that it has very close relationship with current products or markets.

Next, you must follow up immediately with statements acknowledging that such a strategy is generally regarded by authors as corporate level strategy (provide reference, any good text will do. Maybe 2). The reason that writers generally do so is because it is thought that a diversification would require a new and different set of strategic capabilities from what the firm currently has. And it also generally accepted that two different sets of strategic capabilities should reside in two separate businesses (or Strategic Business Units; SBUs). This is further supported by Porter who argue against mixing broad market and narrow market strategies within a SBU because different sets of strategic capabilities are required (e.g., Singapore Airlines and Scoot). Trying to execute two disparate or divergent sets of capabilities within one organisation can lead to conflicts and inefficiency. Hence, a diversification strategy would entail the need to set up a new business unit. Setting up a new business unit is corporate level strategy. This explanation will demonstrate that you know what is corporate level strategy.

Then you explain that however, in your case, your related diversification is a business level strategy based on the following argument. Firstly, the new product/service or market is highly related to your existing offering. The relatedness of this diversification is close enough for the organisation to be able to provide this new product/service or serve the new market with existing strategic capabilities, or at most with an upgrade of its existing strategic capabilities (you have to decide which one fits your case). Then go on and explain what are your strategic capabilities, and how in their present form or enhanced state, they can continue to be used for existing as well as new products/services and/or new markets. Example, you can continue with the use of existing post offices, albeit with some additional staff. You need to be thorough on this, providing as much details as possible. Most importantly, it does not require the organisation to acquire unrelated strategic capabilities. Having a distinctive set of strategic capabilities is one of the definitions of an SBU, (see JWS ch 6; you should reference this). And since, you have one set of capabilities that can handle different products and/or markets, the latter can be kept under a single business. So, the new product/service and/or market can be provided for by the existing business, which is the Mail Business. No new businesses need to be set up. Therefore, this new product/service and/or new market strategy is a business level strategy. Diversification

Need to be Favorable to our strategy

Diamond Porter/ of undeveloped countries/ neighboring countries/ASEAN easier to enter the market eg, Laos, Cambodia, Myanmar (Singtel go into Myanmar)

Why you want to enter into that country?

What entry strategy? Joint Venture, look at political reasons.

Propose Strategy (Value, Sustainable Competitive Advantage, Porter's, Miles and Snow, TOWs, blue ocean, strategic clock- mention w ref)

a. What is the aim of the proposed strategy, what value do you deliver with it?

b. What do you about the areas that are lacking?

c. What are the pitfalls of your strategy and how we are going to avoid it. -> limitations of the country eg, low spending power, high capital (Setting up postbox, office building etc)

d. List all the models to show that we know, one or two lines but then mention more in the model framework we going to use, identify limitations. May use more than 1 model.

e. Justification.