SGMT 3000 Lecture Notes - Lecture 10: Cash Flow, Outsourcing, The Attractions
13 Dec 2017
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As firms turn to contract manufacturers for production they help build an industry wide resource that lowers barriers to entry. Chapter 10: corporate level straetgy: related and unrelated diversification. If investing back into the company it is important that they only do so if they are expecting to create greater cash flow and greater dividends with this move. P&g makes paper towels, toilet paper and disposable diapers all focus on absorbency of paper products. P&g can develop these 3 together and sell them together to retailers (lowering costs) Telecommunication packages: customers want to get the reduced cost that comes with bundling products/services together, bundling does not require joint ownerships can be achieved through market contracts. For diversification must be a strong need for coordination between producers of different products that cannot be overcome through market contracts: utilizing general organizational competencies.
