Research the firm’s value chain and diversification strategies. Very likely a value chain depiction is already
Look for opportunities to improve competitive advantage and ROIC through vertical integration or outsourcing.
Research the levels and types (related versus unrelated) of product diversification in the product lines and
industries and associated revenues and profits. Look for strategic rationale in building the “portfolio” – what
capabilities and competencies are being leveraged and how? Also, look for vehicles of diversification –
acquisitions and mergers, joint ventures, strategic alliances, and partnerships.
Analyze the information in the context of diversification strategy frameworks presented in the readings. What
does the firm’s diversification behavior indicate regarding the balance between increased performance
associated with diversification and the increased bureaucratic costs?
How is the company organized (such as divisions, SBUs, geography, matrix or combination) and how does that
fit with the rationale for diversification? Include an organizational chart for your selected company.
Based on an understanding of the firm’s competitive advantage, what is being leveraged vertically and
horizontally, and how is diversification of the firm shaping its competitive advantage? How is it shaping the
firm’s ROIC in the short run versus the long run (i.e., over time)? Again, attempt to find changes to this metric
in correspondence with these types of decisions being made within the company.
Report your findings as a description of the firm’s Value Chain and Diversification strategy. Include critical
commentary or analysis to indicate the “fitness” of the observed strategy with the strategy criteria from the
readings, including the rationale for outsourcing. Can strategy alternatives be used, in related or unrelated
industries, that better fit the company’s competitive advantage? Are there diversification opportunities that
require capabilities investments not yet considered? Does the analysis indicate strategic opportunities and
threats that have not yet been considered in the firm analysis? This could be helpful in developing
recommendations for your next assignment.
Here are some examples: 1 (Links to an external site.) & 2 (Links to an external site.).
Possible outline:
Value chain
Primary activities
Support activities
Horizontal integration
Vertical integration (upstream or downstream)
Outsourcing activities
Vehicles for diversificatio