CREATING CORPORATE ADVANTAGE

STARTEGIC MANAGEMENT II

Group A02
Abhinav Chauhan (17PGP001)
Megha Kanapala (17PGP076)
Mojahid Rahim (17PGP077)
Nabyendu Saha (17PGP080)
Nilanshu Raj (17PGP088)
Pankaj Kumar Sharma (17PGP096)
 CREATING CORPORATE
ADVANTAGE

Less Executives are capable of achieving competitive

relevant advantage at Individual Business level

More But they fail to achieve the Corporate Advantage

relevant across multiple business
The Triangle of Corporate Strategy
Resources

Organization Businesses

• When the resources are critical to success, they create competitive advantage to business
• Fit between company’s measurement and reward systems and its businesses produces strategic
control
Choices along
The Resource Continuum
• Corporate strategy is a carefully constructed system of interdependent parts which are aligned with
one another
• The firm’s resources are the unifying thread, which ultimately determines the others
• Resources for corporate advantage range along a continuum

Highly Specialised Very General

The Resource Continuum

general nature of resources specialised

Tyco Newell Sharp

wide scope of businesses narrow

transferring coordination mechanism sharing

financial control systems operating

small corporate office size large

 • Basic business is of manufacturing and
distribution of volume merchandise lines to
Newell’s volume merchandisers
Corporate • A combination or package of lines going to the
large retailers carries more marketing impact
Strategy than the line separately
• Basic tenets have remained largely unchanged
 • A $14 billion consumer electronic giant
• Sits near the specialised end of resource
Sharp’s continuum
• Seen at one time as a second tier competitor by
Corporate its Japanese rivals, it has consistent pursuit of a
Strategy vision of technological creativity has pushed it
to the forefront of the industry
 • A $12 billion conglomerate built around a set of
very general resources that it leverages into a
wide range of businesses
Tyco’s • It illustrates that a carefully conceived and
Corporate implemented strategy can create substantial
amount of value
Strategy • Since 1993, the market capitalisation has grown
from $12 billion to $25 billion
• Return on equity in 1996 was 16%
 Comparing corporate advantage of Newell, Sharp and Tyco
Company Newell Sharp Tyco
Factors
Resources and Relatedness across its business due Set of specialised optoelectronic Financial controls, god incentive program,
Businesses to common resources they draw on technologies strong manufacturing and operating
managers
Organisation Modest organisational cost with Extensive, intricate coordination of • Division presidents act like
autonomy and accountability of its shared technological activities entrepreneurs within their groups
independent business units • Disciplined financial control and steep
incentive
Coordination • Transfer of critical resources • Research and manufacturing of No intention of a lot of coordination across
• Share of advanced data- key components like LCD business
management system • Product managers for entire
chain of value chain activities

Control • Focus on 30 important critical • Promotion on the basis of No need of much of corporate staff
System variables to success seniority and subtle skills
• Central compensation system • Company as a family
Corporate • Centralised data-management
office system
• High level relationship with
customers
 1 2 3 4
Many strategies do Resource continuum Company’s business The strategy is based
not enhance values and range of must not be worth on all the elements
strategies provide a more to another of strategy triangle
useful starting points owner and their fit

Ways to succeed