Case Study (b) Discuss the nature and role of corporate-level planning in a conglomerate

such as YTL Berhad.

YTL Corporation Berhad is one of the largest companies listed on the Bursa Malaysia, and
together with its five listed entities has a combined market value of about RM 34 billion, the
company has a total asset of over RM45 billion. The major business carries out by YTL
Corporation included power generation, construction contracting, property development, hotel
development and management, cement manufacturing, supply of water, treatment and disposal of
waste water, and incubating and advisory services for internet businesses. The success of YTL
Corporation is because they using the right way of the strategy planning process. This process is
most applicable to strategic management at the business unit level of the organization. For large
corporations, strategy at the corporate level is most concerned with managing a portfolio of
business. For example, corporate level strategy involves decisions about which business units are
to grow, resource allocation among the business units, taking advantage of synergies among the
business units, and mergers and acquisitions. Company will be used to indicate a single-business
firm or a single business unit of a diversified firm.
Corporate planning strategies provide corporate with specific guidelines or rules for improving
business operations and advancing the companys mission. These strategies provide managers and
employees with a targeted direction for the company. Business owners can also use strategies as a
reference to ensure certain business opportunities that will overextend the companys resources
are avoided. The strategies include concentration, vertical acquisition, diversification,
conglomerate, retrenchment, divestiture, liquidation and so on.
Furthermore, portfolio management approach helps to allocate resources in multi business
companies. It is an approach pioneered by the Boston Consulting Group that attempted to help
managers balance the flow of cash resources among their various businesses while also
identifying their basic strategic purpose within the overall portfolio.
Next is synergy across business unit. Opportunities to build value via diversification,
integration, or joint venture strategies are usually found in market-related, operations-related, and
management activities. Strategic analysis is concerned with whether or not the potential
competitive advantages expected to arise from each value opportunity have materialized. The
most compelling reason companies should diversify can be found in situations where core
competencies, the key value-building skills can be leveraged with other products or into markets
that are not a part of where they were created. Each core competency should provide a relevant

competitive advantage to the intended businesses. Businesses in the portfolio should be related in
ways that make the companys core competencies beneficial. Any combination of competencies
must be unique or difficult to recreate.
Lastly is parenting framework and patching approach. The parenting framework are the
perspective that the role of corporate headquarters in multi business companies is that of a parent
sharing wisdom, insight and guidance to help develop its various businesses to excel. It sees multi
businesses companies as creating value by influencing or parenting their businesses. The best
parent companies create more value than any of their rivals do or would if they owned the same
businesses. Patching is the process by which corporate executives routinely remap their
businesses to match rapidly changing market opportunities by adding, splitting, transferring,
exiting or combining chunks of businesses. Patching is not seen as critical in stable and
unchanging markets. When marketers are confused and rapidly changing, patching is seen as
critical to the creation of economic value in a multi business company.