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Corporate level strategy (Extending the Core Business (Diversification)…

- - - - financial resources highly flexible and associated with greater extent of diversification
      - physical resources (plant & equipment) less flexible & usually associated with related diversification
    - - may offer the basis for more lasting value creation through diversification
- - - - operational relatedness in sharing activities, but operational relatedness can also create value
    - - corporate relatedness in transferring skills or corporate core competencies among units and between units and HQ,but corporate relatedness can also slash costs
- - - - Efficient internal capital allocations
        
        Corporate office distributes capital to business divisions to create value for overall company. (It knows their actual and potential performance)
        
        In developed countries, financial economies are more easily duplicated by competitors than are gains from operational and corporate relatedness.
      - Purchase of other corporations and restructuring the assets
        
        Resource allocation decisions may become complex, so success often requires:
        
        focus on mature, low-technology businesses.
        
        focus on businesses less reliant on a client orientation.