Corporate Strategy Diversification - Prof. Dr. Bernd Venohr

Horizontal diversification: Significant management
challenges in actually achieving the potential benefits
� Diversification alone will not produce superior performance: “benefits
don’t just happen”
� Management skills in capturing potential benefits of interrelationships
are a key success factor
� Key levers are:
– strong sense of corporate identity and mission that emphasizes the
importance of integrating business units
– allocation of management attention
– allocation of capital and shared resources to different business units
– management hiring/training
– incentive systems that reward more than just business unit performance
© 2006 Dr. Bernd Venohr
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