Strategic Plan and Management in a "CORPORATE WORLD"

Running business is not easy that we always think especially when the business is become really big and listed in the Bursa Malaysia. It is takes a lot of effort in planning and managing it. The risk need to bear by the top level management in how they are planning to do to maintain and increase the profit for the business. In the corporate strategy the company can choose either 1 to use, the first one is diversification and the second one is create multibusiness company. 

If we choose for the diversification or create multibusiness company, actually we have 4 other types of diversification and multibusiness can be choose that suitable for the business.

• Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses. like what had been done by the Sime Darby Plantation, they made a "JV" with one of the company in Thailand to produce the end use of palm oil. So the Sime Darby plantation is not just only focusing int the business of plantation palm tree. 

• Broadening the current scope of diversification by entering additional industries. This strategy use by the UMW Holding where they "Sub Business Unit" to the 4 unit. Automotive assembly and distribution, Automotive components and lubricants, OEM and REM heavy equipment and oil and Gasdrilling service industries.

• Divesting some businesses and retrenching to a narrower collection of diversified businesses with better overall performance prospects. An example for this steps is Air Asia, where air Asia narrow down the business line by provide Tune Hotel, Insurance and Tune talk. And overall performance from every line give big impact to the Air Asia profit performance.

• Restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm’s business lineup. MAS Airline faced trouble in their financial so to recover it back they think the MAS catering is not efficient in their business, so they restructure the MAS catering by passing the share to the other company which is Berahim company.

W     Whatever we decide to use for the diversification to the company by entering into related business or entering into unrelated business or entering into both business related and unrelated business it have their own advantages and disadvantages. Just bear in your mind risk is everywhere, be prepared and choose the best for your company. Diversification give opportunity to the company to expand into businesses whose technologies and products complement its present business, resources and capabilities can be used as valuable competitive assets in other businesses, costs can be reduced by cross-business sharing or transfer of resources and capabilities and the company can transferring a strong brand name to the products of other businesses helps drive up sales and profits of those businesses.....

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