The shutting down of the operations of a business units and the sale of its assets.

Is the process of acquiring or merging in the industry competitors in an effort to achieve the competitive advantages that come with large size or scale. An acquisition occurs when the company uses its capital resources to purchase another company and merge is an agreement between two companies to pool their resources in a combined operation

Selling a business unit to the highest bidder. Three types of buyers are independent invertor, other companies, and the management of the unit to be divested.

a corporate-level strategy that involves a company entering new industries to increase its long-run profitability . Company is able to enter new industries that add value to the “core” product it make and sell because entry into these new industries increase the core product` differentiated appeal or reduces the cost of making them.

allowing a company to combine the product lines of merged companies in order to offer customers a wider range of products that can be bundled together.

Achieving economies of scale is very important in industries that have high fixed costs, because large-scale production allows company to spread its fixed costs over a large volume, which drives down average operating costs.

The strategy of operating a business unit in a new industry that has no value chain connection with a company's existing business units.

Top managers seek out companies in new industries where they believe they can apply these competencies to create value and increase profitability. Alternatively, corporate managers may decide to acquire a company in a different industry because they believe the acquired company possesses superior skills that can improve the efficiency of their existing value creation activities.

describe companies that outsource most of their functional activities and focus on one or a few core value chain functions.

A strategy in which a company acquires inefficient and poorly managed enterprises and creates value by putting a superior financial governance structure in place in these acquired companies. This strategy can be can be considered diversification because the acquired company does not have to be in the same industry as the acquiring company.

one company that has significantly increased its use of outsourcing in recent years. It has a $3.2 billion contract with Electronic Data Systems (EDS), a global IT consulting company, to manage and maintain all Xerox’s internal computer and telecommunications networks.

agreement between two companies

is the strategy of offering customers the opportunity to buy a complete range of the product they need a single, combined price.

The phenomenon that shares of stock in highly diversified companies are often assigned a lower market valuation than shares of stock in less diversified companies

the process of entering one or more industries that are distinct or different from a company`s core or original industry

The halting of investment in a business unit to maximize short to medium term cash flow from that unit.

The sale of a business unit to another company or to independent investors.

the worlds largest maker of athletic shoes, has outsource all its manufacturing operations to Asian partners, while keeping its core product design and marketing capabilities in-house.

The strategy of operating a business unit in a new industry that is related to a company's existing business units through some commonality in their value chains.

Certain senior executives develop superior skills in managing and overseeing the operation of many business units and pushing the managers in charge of these business units to achieve high performance

A second tactic that a company may deploy to improve its competitive position in an industry is to outsource one or more of its own value creation functions and contract with another company to perform that activity on its behalf

Acquiring or merging with a competitor helps to eliminate excess capacity in an industry, often triggers price wars. By taking excess capacity out of an industry, horizontal integration creates a more benign(gentle) environment in which prices might stabilize or even increase.

The strategy a company adopts when it focuses its resources and capabilities on competing successfully within a particular product market.

In most cases, companies that are engaged in restructuring are divesting themselves of diversified activities and downsizing in order to concentrate on fewer businesses.

The sale of a business unit to its current management

Achieving more bargaining power over suppliers or buyers, which strengthens its competitive position and increasing its profitability at their expenses. By using horizontal integration to consolidate its industry, company becomes a much larger buyer of a supplies product it can use this buying power as leverage to bargaining don the price it pays for inputs, and this also lowers its costs.

It expand its operation either backward into industries that produce for its core products or forward into industries that use, distribute, or sell its product