Managerial and Competitive Resource Fits

Question

Explain about managerial and competitive resource fits.

Answer 1

Managerial and Competitive Resource Fits:

A diversified company’s strategy must goal at generating a fine fit between its resource capability and the managerial and the competitive requirements of its businesses. Diversification is more probable to increase shareholder value when the company has or can develop powerful managerial and competitive requirements of its businesses. A difference between the company’s resource strengths and the main success factors in a particular business can be grave enough to deserve divesting an existing business or not acquiring a new business. A diversified organization can fail the resource fit test by not having enough resource depth to support all of its businesses. A diversified company has to protector against stretching its resource foundation too thin and trying to do too many things.