This 7 page paper examines a case study supplied by the student where a company has lacked direction and failed to develop a competitive advantage. The writer looks at the diversified company, recommends a new strategy, including divestments, justifies the advice and gives a financial projection for recommended strategy. The bibliography cites 3 sources.
Name of Research Paper File: TS14_TEconpack.rtf
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environment. The constant changing has meant there has been no concentration on a single sector so not only has there been the lack of development of any competitive advantages, the
core competences also appear to be weak. The company has sought to diversify, and although this can reduce the risk a company faces by reducing the impact of risk
in any single sector with presence in others, it has also impacted on the growth the company has seen. The company where it does compete well is now much smaller
than the major competitor in each market. The divestment of many businesses in order to create a more directional company with only four divisions did not realise the level
of capital desired and the lack of capital available is also showing in the companies that have remained where in three of them there is the need for investment to
bring plants back up to standard or to in research and development, such as to find new oil reserves and develop new production facilities. The new structure of the
four divisions still sees a company that is diversified and still has no competitive advantage or unique characteristics which will readily lend themselves to the creation of a competitive advantage.
To develop a strategy for the future the current weaknesses need to be recognized and ways of reducing these weaknesses to enable the company to compete need to be
found by the student. This means looking at the resources the company has and considering how these can be maximised to gain the best returns. For this the company needs
to be able to develop a competitive advantage. Michael Porter has considered the way in which firms compete, and defined two types of competitive advantage. These are cost advantage
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