Week 6: Chapter 6 Discussion
- hearwood5
- Mar 1
- 2 min read
Chapter 6 of Strategic Management: Creating Competitive Advantages outlines the concept of diversification in business, where a firm expands its operations by entering new businesses. This can be accomplished through a merger, acquisition, strategic alliance, joint venture, or internal development. Diversification provides multiple benefits for the firm, such as the firm’s improved ability to leverage its core competencies, share activities, pool its negotiating power, implement vertical integration, complete restructuring and parenting, and manage its portfolio. Alternatively, when a firm is not seeing the desired returns on its investment in diversification, it will move to divest the firm it merged or acquired, to disengage from its strategic alliance or joint venture, or to invest in other development strategies. Grainger has participated in a joint venture to strengthen its corporate strategies of growing its health care segment. In 2019, Grainger partnered with HealthCare Facility Compliance Corp. to offer a tablet-based software for health care providers to improve their facilities’ efficiencies, patients’ experience, and emergency readiness (1). This software helps health care providers ensure their facilities are operational, safe, and compliant by managing, tracking, and maintaining critical facility information (1). Grainger also participates in multiple strategic alliances with its various suppliers, resellers, and service providers, to provide customers with the desired support while empowering small, local, or veteran-owned businesses (2). In recent years, Grainger has updated its corporate strategy to better align with its plans to focus its portfolio in North America and Japan. This has included divesting Cromwell, a United Kingdom based business that Grainger acquired in 2015 (3). Additionally, Grainger is finalizing its plans to shut down its Zoro U.K. business (3).
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