Diversification strategies raise a wide range of strategic management issues. For this assignment, select a KSA company whose strategy includes or included diversification and explore its motives, competitive advantage, and strategic planning based on the topics from Chapter 12 and the assigned reading.
- Identify and provide company strategic details and consider what circumstances existed that motivated this company to diversify.
- What mode of diversification did the company adopt? How does this relate to their resources and capabilities?
- What are the benefits of diversification in this industry and how significant are they in the shape and growth of the industry?
- Discuss the implications of the strategy chosen for the:
- Organizational structure,
- Management systems, and
- Allocation of decision making within the diversified firm.
- Student must apply Saudi Electronic University academic writing standards and APA style guidelines.
- Support your submission with course material concepts, principles, and theories from the textbook along with at least two scholarly, peer-reviewed journal articles.
- A mark of zero will be given for any submission that includes copying from other resource without referencing it.
- Write at least 6-7pages in length, excludingthe title page, abstract and required reference page, which are never a part of the minimum content requirements.
- It is strongly encouraged that you should submit your assignment into the safe assignment Originality Check prior to submitting it to your instructor for grading.
Answer preview
Saudi Aramco is a state-owned corporation majorly focussing on the exploration and exploitation of Saudi Arabia’s oil reserves. The main reason the company implemented its diversification strategy revolves around the need by the Saudi Arabian government to diversify its revenue streams (Albassam, 2015). Saudi Aramco is a significant financier of Saudi Arabia’s budget, considering the government is the company’s majority shareholder. According to financial experts, the company gives away close to eighty-five percent of its net profits to the government. That is a lot of money considering the fact that the company made over one hundred billion dollars in net earnings during the 2019 fiscal year.
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