IMC00 WEEK 7: CORPORATE LEVEL STRATEGY

AGENDA

Pantha rhei (everything flows) – Parmenides (535 – 475 BCE)

▸Highlights from the Theory: Balancing Synergy & Responsiveness

▸This Week’s Paradox in Sports

▸Managing the Synergy/Responsiveness Balancee

▸Portfolio Assignment: VION, Again

The Synergy vs. Responsiveness Trade-off

Synergies:•Strategy•Finance •R&D•Marketing•Logistics

Responsiveness:•Strategy•Finance •R&D•Marketing•Logistics

Synergy

Responsiveness

Competence Focused Synergies

• Physical characteristics• Long armspan • Overextendable joints

• Training• Same muscle groups • Start & Turn

Some synergies, but …

0:30 – 0:50 min. > Synergies: Weight, arm strength, centre-ring dominance, 8:39 – 9:25 min. > Lack of Responsiveness: Endurance, Speed, kick & punch defence

Resolving the conflicting perspectives ofintegration vs. autonomy

Classroom discussion:

How do you manage synergy/responsiveness across business units in a multi-unit firm?

1.When and what do you integrate or synergize?

2.When and what do you leave autonomous?

Portfolio Assignment

Introduction:

For one of the previous consultancy meetings, you have studied the VION case (Meyer & De Wit, 2010, pp. 862-871). In the face of increasing foreign competition, VION found itself at a cross-roads with regard to its future corporate strategy. From the point of view that we’ve adopted in our previous reading, the question for VION seemed to be whether it should adapt to the competitive dynamic that the big foreign competitors brought to Europe (aggressive expansion through backward integration in order to attain economies of scale) or that is should somehow take the lead in shaping a different competitive dynamic.

Viewed in this way (i.e. through the lens of the paradox and the two perspectives from chapter 8), VION appeared as a company that suffered from a disadvantage in size, but that was otherwise in good shape. When we revisit VION’s situation and analyze it through the lens of chapter 6, however, one might draw different conclusions. Especially with the benefit of hindsight (see, for example, http://www.vionfoodgroup.com/en/news-press/press-releases/post/vion-announes-new-course/show.html) it seems that VION’s corporate level strategy suffered from a disbalance between synergy and market responsiveness.

Assignment:

Evaluate VION’s corporate composition during the time period described in the case in Meyer & De Wit. Think of reasons and provide your own explanation why the divestments announced in the press release (see link above) were necessary at VION. Use the theory, the paradox and the perspectives from chapter 6 of Meyer & De Wit.

1 A4 max. Hand in together with your other portfolio assignments, as your complete strategy (which) should be e-mailed to d.p.gijsbertse@hr.nl before 6 nov, 12:00 hours. E-mail subject: IMC00 Portfolio. File name: surname1&surname2_portfolio.docx (e.g. Gijsbertse&VanStiphout_portfolio.docx)