Market Analysis
This dimension of analysis typically receives a great deal of attention from corporate-level planning management—especially in firms with related businesses. Whereas individual businesses or subsidiaries might not be large enough to justify the resources required for evaluating a full scope of economic, industry, or market trends and potentials, such resources well may be afforded at the corporate level and shared with all corporate entities. This is one illustration of administrative economies of scale that may be achieved by the multi-division corporation. Providing such services from a central location also should help to assure that plans submitted by different businesses will begin with a similar outlook for external business conditions during the planning period.
Conversely, by consulting with operating managers of each business about the economy, industry, and markets, the planning staff can maintain a realistic appraisal of environmental problems and opportunities as they impact each business and thereby, it can better advise top corporate management on marketing potentials within the portfolio of corporate entities. Individual business units usually formulate goals based on their respective shares of individual market or industry segments. But only when business units are closely related to each other is it possible for corporate-level goals to be expressed in competitive terms. Thus, multi business firms that confine their portfolios to relatively limited lines of business—for example, those in the basic metals, petroleum, chemical, textile, and food-processing industries—are able to formulate consolidated competitive goals based on market shares or other indicators of competitive position. But highly diversified enterprises can't establish market-share goals at the corporate level.
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