Quiz 6: Corporate-level Strategy: Creating Value Through Diversification
Benefits derived from horizontal and hierarchical relationships are mutually exclusive.
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When firms diversify into unrelated businesses,the primary potential benefits are horizontal relationships,i.e.,businesses sharing tangible and intangible resources.
For a core competency to create value and provide a viable basis for synergy among the businesses in a corporation,it must at least create superior customer value and it must be difficult to imitate.
Gillette developed the Fusion and Mach 3 shaving systems.These products created superior customer value as a result of the company core competency in research and development.
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