Diversification
A company that sells smartphones starts selling smartwatches. Is this:
A. Related Diversification
B. Unrelated Diversification
a
True or False:
Acquisition is usually faster than internal development.
True
What is the new name of the merged company formed by Novozymes and Chr. Hansen?
Novonesis
What is a synergy?
When two companies together create more value than they could separately.
Before the merger, Novozymes was strong in industrial enzymes, while Chr. Hansen was strong in food cultures and probiotics.
In a post-merger SWOT analysis, which SWOT category is strengthened the most?
A. Weaknesses
B. Threats
C. Strengths
D. External Risks
C. Strengths
The merger combines complementary competencies and products, creating a stronger resource base. Novozymes was #1 in industrial enzymes, while Chr. Hansen was #1 in food cultures and dairy enzymes.
Which is the BEST example of unrelated diversification?
A. Nike buys a fitness app
B. Starbucks buys a coffee bean supplier
C. McDonald's buys an oil company
C
Complete the sentence:
Companies often acquire firms because it is faster and ______ uncertain than developing capabilities themselves.
Less uncertain
Which company was the global leader in industrial enzymes before the merger?
Novozymes (~48% market share)
Name one function where Novozymes and Chr. Hansen could create synergies.
Name ONE market opportunity that both companies could pursue more effectively after the merger.
Why is internal development often difficult for diversification?
Firms are path dependent.
Why did Tata Motors' share price initially fall after acquiring Jaguar Land Rover?
Investors worried about:
Chr. Hansen was the global leader in which products?
Food cultures and dairy enzymes.
Which grows faster according to the case?
A. Enzymes (~5% CAGR)
B. HMOs (~18% CAGR)
B. HMOs (~18% CAGR)
If you were the CEO, what would be the strongest strategic reason to merge Novozymes and Chr. Hansen?
A. Reduce competition only
B. Access complementary technologies and capabilities
C. Enter the oil industry
D. Diversify into unrelated businesses
B. Access complementary technologies and capabilities
Both companies operate in BioSolutions and have complementary expertise in enzymes, microbes, cultures, fermentation, and biotechnology.
Which diversification type generally has the highest chance of success?
A. Unrelated
B. Related Constrained
C. Related Linked
B
A company buys another company outside its industry. What major risk increases?
Integration and management risk
The acquirer may lack the knowledge and capabilities to run the new business.
Give ONE strategic reason why Novozymes and Chr. Hansen merged.
Based on diversification theory, what type of diversification best describes the Novozymes–Chr. Hansen merger?
Both Operational and Corporate Relatedness
This is the highest-success quadrant.
How could the merger help reduce a weakness that each company might face by itself?
By combining resources, R&D capabilities, knowledge, patents, production facilities, and market access.
A larger company can spread costs, innovate faster, and compete more effectively with global rivals such as BASF and DuPont.