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Corporate strategy: parenting advantage

For firms with multiple business units, the ‘corporate’ strategy at the centre involves deciding which businesses to be in, and how best to add value to those businesses. Parenting advantage is a way of making sense of the portfolio of businesses within such a firm, and identifying which businesses to focus on.

When to use it

  • To understand how the portfolio of businesses within a single corporation fit together.
  • To identify opportunities for creating greater synergies between businesses.
  • To identify opportunities for breaking up the corporation or spinning off certain businesses.

Origins

Academics and business people have made a conceptual split between business-unit strategy and corporate-level ...

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