Diversification Strategy
Corporate Strategy and Diversification
Corporate diversification strategies raise a wide range of strategic management issues. For this week’s critical thinking assignment, read the case study found in your textbook (Case 19): Google Is Now Alphabet—But What’s the Corporate Strategy?
Remember, a case study is a puzzle to be solved, so before reading and answering the specific case and study questions, develop your proposed solution by following these five steps:
Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
Describe in some detail the actions that would address or correct the situation.
Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.
Complete this initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.
Case Study Questions:
What is Google’s corporate strategy? Does Google have a clear vision of what it wants to become?
Use Porter’s Essentials Test (Chapter 12) to determine if this strategy creates competitive advantage. If so, how? If not, why not?
Look beyond the conventional sources of synergy and consider complementarities, bargaining power, and rivals. What threats does Google face?
Does Google need to refocus? How should Google delineate its corporate boundaries and which businesses, or products would you recommend abandoning or divesting, if any?
Sample Solution
Diversification Strategy
Google Inc. (Google) is a relatively new company that started as a project by Larry Page and Serge Brin to organize websites (Duthel 27). Although Google`s initial business strategy focused on the search engine business, its success has surpassed this business niche. Google`s Corporate Strategy is to accelerate innovation and strengthen brand loyalty through transformational changes while creating an open-source environment. Its corporate strategies increased corporate overall value. These strategies allow for Google to reach out to consumers and create a competitive advantage. Google`s competitive advantage is it provides an incredibly fast search and tools to support the general search engine. Competing search engines such as Bing and Yahoo! The creation of Alphabet is the epitome of Google`s diversification ultimately separating core business from non-core ventures as Google Capital and GoogleX.
