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Saturday, December 7, 2013

CORPORATE STRATEGY: DIVERSIFICATION AND THE MULTIBUSINESS COMPANY


Diversification is companies that have many businesses. During the lecture Miss Ummi have advice us if we want to open a business it’s better to start with small business and we also must have our target market. Therefore, with this we can get success and expand our business.


So, back to these topics. Before we attend to lecture class my class has attended tutorial class and we have discussed about UMW case study. Seriously I did not understand what the case study all about. It is long case study and I just know that this UMW Holding have four core business which are automotive assembly and distribution, automotive components OEM and REM, heavy component and last oil and gas drilling services. So, for the question that have given by Miss Ummi related with this case study only half I can answer. After having a discussion in the class I understand what the case study all about. Then, during lecture class I got prepared for this topic. There also synergy term in this topic that means 1+1=3. From core concept, creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its part. This means that diversifying into a new business must offer potential for the company’s existing business and the new business to perform operating as independent and stand alone business. That’s all for this topic.. (^^,)


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