Reinventing the San Miguel Corporation (B)
(4 pages of text)
This supplement to Reinventing the San Miguel Corporation (A) provides a brief update on the diversification strategy pursued by the company.
The case provides a comparative illustration of the advantages and disadvantages of following two alternative diversification strategies:
- selling similar products in diverse countries versus
- selling unrelated products within the same country.
The case demonstrates numerous issues surrounding these two diversification strategies, revolving around questions about the underlying strategic considerations managers in a firm must make during the pursuit of either type of diversification. Both types of diversification strategies can be taught with their own separate frameworks and learning objectives. For international diversification, the case provides sufficient information for students to understand the factors that constitute the optimal internationalization strategy. For domestic product diversification, the case provides an illustration for understanding the genesis of business groups or conglomerates which are prevalent in many countries, particularly in emerging markets. The nature of this case allows students to explore how and why successful companies grow to become diversified business groups.
Philippines; Malaysia, Large, 2012
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