Need help with my Week 8 discussions. In the attachment, there are 2 discussions and the required length for each discussions is 350-375 words.
discussion_8.docx
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Discussion 1: Week 8 Discussion: ADR
model and corporate strategy
This is a ‘thought question’. Explain what the ADR model informs managers about
unrelated diversification? About related diversification? The question is meant to get you
to think critically about these two forms of diversification, and how ADR informs the
discussion, or would have to say about both forms. Likewise, you could also think about
how ADR informs the understanding of entry modes like ‘greenfield’ or acquisition?
Discussion 2: Week 8 Discussion:
Evaluate This Firms Decision
After reading the content on Week 8: The “Strategic Bet”. complete the following discussion
question. Refer to the strategic situation below and evaluate this company’s (lower right hand
quadrant) decision (to increase resource commitment) using the ADR framework. Hint: Do not
change the question; do not add new facts, evaluate the ‘attack’ decision from an ADR model
perspective. Use the expectancy-valence logic to discuss this strategic move. Do you agree or
disagree with the decision given the strategic context (aka strategic situation regarding
expectancy and valence)?
The Strategic Bet
When a company with low Relative Strength in a high Stakes market decides to
increase resource commitment (i.e. attack), this is referred to as a “strategic bet” in the
language of ADR. Strategic bets are “doubling down on a weak hand” with only
moderate motivation to act. The strategist is attacking (applying effort, resources etc.)
while weak, which strategically is not strongly recommended. The lower (higher) the
Relative Strength, the greater (lesser) the strategic bet.
Why place this bet; why attack and not retreat given the low relative strength? The
answer is, companies take such strategic bets when either (1) they misread the
strategic situation and believe they have higher Relative Strength than they do; or (2)
they believe the additional resource commitment will increase their overall Relative
Strength in the given battle, and thus they will be in a better position to take a larger
slice of the pie in the future. These firms, though weak in this particular market, are not
ready to retreat as the stakes remain high, so they accept the risk of additional
investment. This often means new product design and development, additional
capacity, marketing, distribution etc. But it remains a bet because the outcome is not
easily predictable. Compared to committing additional resources when relatively strong
and confidence is high, a strategic bet is highly risky and needs to be viewed as such.
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