Corporate Diversification - Essay Example

Option No. 01 - ROBIN HOOD The intended and emergent strategies are market driven, the quantitative of the market followed by their expectations are the motivating forces which mould the strategies and the policies of the individual. The individual during its operation has to monitor and control the public demand, followed by the standards of the goods being demanded. The standards of the goods being sold in the market are transitional, and experience consistent changes with the passage of time. The changes beyond being public motivated, can be influenced and generated by the other companies themselves. In the modern era, the concept of the need analysis of the market has toppled, and followed by the measures which transform and influence by need of the public i.e. the public is advice to adopt the changes introduced by the companies. Such measure has resulted in competition, and since then onwards the companies have attempted to topple the interests of their rival companies through proactive assessment of the market. The case of Robin Hood is similar to an individual trapped in the market complications, and these complications are emergent i.e. based upon socio-economic-political scenario. The implementation of the successful projects is essential for the development and the progress organization. The Robin Hood has been successful in the implementation of the comprehensive plans i.e. strategic drift, aimed at the performance and production enhancement, along with the incorporation of the latest technological applications into the product. The success is possible through the implementation of the result-oriented project management techniques; this requires the active and vigilant involvement and contribution of the upper management. The comprehensive strategy requires the identification of the areas which require enhancement and modification to ensure the success implementation of the project, beside the management has to quantify the project contributions. Robin Hood has to realize that he has to expand the operation of his unit, sticking to the traditional activity will never restrict the access to emerging avenues, which lead to the non-detrimental increment of funds. Robin Hood must realize that the success of the installation of the project is achievable through successful collaboration and implementation of the well-designed systems of communication. In the case of former, the coordination plays a crucial and determining role, and every success is attributed to the team efforts and the responsible authority, therefore the acknowledgement practices are widely common and practiced in this case. However, in the case of latter practice, the focus is converged on the communication techniques and their effectiveness. This is with reference to this specific case, the element of ideas and designs are paramount for the existence and survival of the unit. Robin Hood lacks experience, but has vision, not only that but he also has the ability to critically and analytical evaluate the scope of the project i.e. designing capabilities to handle for the situation. His suggestion for the imposition of taxes supports the fact that design and ideas are critical for the success than experience. Option No. 03 - Pharmaceutical Companies In the case of pharmaceutical companies, the company never has the authority to introduce a certain product on its own; rather the production of the pharmaceutical company is based upon consent of the research laboratories, followed by the market assessment. The pharmacy business is not there to facilitate the aspirations of the public through introduction of commercial products, rather the business of the pharmaceutical company is itself extremely responsible and has to driven not through forces of motivation, rather the business is accelerated through need assessment of the public. The pharmaceutical business has to fulfil the requirements of the market with the consent of the research institutions, it never has the permission to evolve the public, and make them captivate towards the particular drug, the need of the public can never be evolved, and rather the need of the public has to be fulfilled by the company. The situation is different from the companies which are involved in banking, finance, engineering and commercial sectors. Banking and finance are purely profit-oriented companies where the assessment of business is based upon the trust bondage exchanges with the customers. Pharmaceutical business is not trust oriented business, it is profession responsible for health-care, which is not just a service but responsibility for which the customers insure themselves. The acquisition and merger of the supplier with the reseller is regarded as vertical merger. In the case of vertical merger, both the parties are involved in buyer-seller relationship. The acquisition of the Medico Container Services by Merck is regarded as vertical merger. The regulatory authorities have appreciated exercises of vertical mergers. It is expected that consumers are also able to benefit from the vertical mergers, because such activities i.e. the integration of the supply chain, increase the efficiencies, the prices stabilize and quality of the services also improve. The corporate diversification has been discussed in detail by the financial economists, the analysts are of the opinion that corporate diversification has lesser degree of favourable impact in judging the benefits of diversification for different reasons. The primary reason is that 'any diversification possibilities that corporations might have, will, in a perfect capital market, already have been exhausted through shareholders' individual portfolio choices'. The secondary reason is that the diversification discount i.e. the diversified corporations have the privilege to trade at discounted rates as compare to their non-diversified counterparts. It has been therefore concluded that corporate diversification is neutral, but has the potential to damage strategy. Surprisingly, the corporate diversification has been strong practice, 'At face value, diversification can be explained by the fact that when pooling income streams that are less than perfectly positively correlated, the resulting income stream is less volatile than were the constituent income streams'(Richard, 2000). With special reference to the critical success factor of several other industrial units, the pharmaceutical companies shall realise that the products which are sold in bulk, but at low profit margins are need driven. The companies which produce such brands are aware with the commonality of the product in the market, therefore the rise in profits will never support the company, and rather the cheaper its sold i.e. above the cost price, the increment in the market share is imminent. In such scenario, the company can be expected to introduce slight modifications into the product which will eventually justify the rise in the cost price, which in return will secure increased profit margin for the company. The special focus of the company shall be towards the performance of the rival companies, whereas the need of the public is constant factor. Option No. 02 - Pharmaceutical Companies Related The participants of the mature market do not take into account the strategies of the rival companies, and for this reason the special focus of such companies is the market. The primary focus of the companies within the mature market is to ensure smooth supply of the goods, which are in regular demand. The demand factor has to be adjusted through the incorporation of the measures and variations based upon the market condition. The mature market certainly share the allowance of introducing competitive products in the market, but such measure is expected to cause negative consequences upon the contemporary practices of the companies associated with the mature market. The element of fashion is always transitional, therefore products associated with arts and fashion are expected to experience continuous shuffle with the passage of time, although it is less relevant to the pharmaceutical industries. The interior designing has been a subject which has transformed with the passage of time, and the transformation of the products is not subject to the conditions and expectations of the market, rather such reforms have evolved due to the initiatives adopted by the respective companies related to research and design industries. Market is the paramount factor which contributes and influences the structure of the industry (Bob, 2001). The pharmaceutical products are widely influenced by legal factors. The court of law has its say over the procedures practiced by these industries. The law of the respective country placed significant role towards the assimilation of such industries in the local market. The competition law in certain parts of the world has confined and limited the role and strategy of such industries, rather it is the government and research agencies which played pivotal role in the development and success of the pharmaceutical products. The law strongly condemns competition if all such fields which are involved in healthcare. Cultural issues play dominant role when such industries are foreign-based. The leadership rubble is considered to paramount issue that has been experienced once the local market staffs have taken over the local administration of such industries. The problem has less to do with the cultural differences, and is much related to the difference of approach and practices in the local market influenced. Previously the employees have the right to make the higher management aware of the dangers, and such practice has really contributed significantly towards the growth and employment of the industry, however once when the high-ups developed their opinion with reference to the struggle of local employees to combat the problem, and achieve immediate relief. The market giant has experienced yet another problem before with referenced to its operation in International market. Option No. 04 - Coopers Creek Study The recent dramatic increase of strategic alliances has led scholars to investigate the causes and consequences of these inter-organizational relationships. This academic effort has developed two identifiable research streams. One stream examines the procedural issues surrounding alliance formation including entry motivations, partner selection, governance structures, and alliance evolution. The other investigates the consequences of alliances such as alliance duration or stability and their influence on partner firms' performance. Unlike the procedural issues of alliances that have been heavily examined in both conceptual and empirical research, aspects of alliance consequences, in particular their effects on rival firms, have received relatively less attention from academic research. Several empirical efforts have examined changes in partner firm's stock prices when the partners announced new alliances. Yet the consequences of international alliance formation on the market value of rival firms have been largely neglected in the alliance literature. The Coopers shall essentially seek the support of government, the intervention of government is essential to protect the interests of the local company. The government shall be requested to either impose taxes or be sterner towards foreign companies, which are working against the interests of the local market. The Coopers shall lease agricultural land to improve its production, and beside shall invest in other parts of the world to ensure availability of grapes at cheaper rates; such a strategy is must to cater for the climatic upsets. It is encouraging to observe that the company has imported technological expertise to optimise the yield of wines, however further advancement shall be incorporated to optimise the overall plant production and capacity. The company shall split focus more upon tangible resources, the intangible resources are product characteristics driven. The tangible resources include the local farms, local farmers, local manpower, governmental policies and infrastructure. The intangible factors are achievable once such quantitative standards are achieved, the quality of product is difficult to achieve unless sizable investment i.e. tangible factor is available. References 1. Montgomery, C. A. Corporate Diversification. Journal of Economic Perspectives. 1994. pp. 165 2. Tirole, J. The Theory of Corporate Finance. Princeton University Press. 2005. 3. Richard L. Sandhusen. Marketing. 2000. Barron's Educational Series. pp. 213-236. 4. Bob Stone, Ron Jacobs. Successful Direct Marketing Methods. 2001. McGraw-Hill Professional. pp. 89-124. Read More