An exploration of the different strategies that conglomerates use to manage their diverse range of businesses and operations

Published on: Thu Mar 09 2023

An exploration of the different strategies that conglomerates use to manage their diverse range of businesses and operations

Conglomerates are large/big corporations that operate across multiple industries or sectors, often with very different business models and operational needs. Managing a wide/broad range of businesses and operations can be a difficult task that necessitates careful planning, coordination, and strategic decision-making. In this blog, we will look at some of the various strategies that conglomerates employ to manage their diverse range of businesses and operations.

Decentralization

Decentralizing operation is a common strategy used by conglomerates. This entails/consists of delegating a high degree of autonomy to each business unit and allowing them to operate independently, with their own management teams and decision-making processes. By doing so, conglomerates can take advantage of the strengths of each business unit, while also allowing them to operate in a way that is tailored to their specific needs and requirements.

Centralization

Another option for conglomerates is to centralise/consolidate their operations. This entails bringing all of their business units under one corporate umbrella and managing them from a single location. This strategy can help to reduce duplication of effort and create economies of scale, while also allowing the conglomerate to more effectively leverage its expertise and resources.

Portfolio Administration

Portfolio management may also be used by conglomerates to manage their diverse range of businesses and operations. This entails carefully evaluating each business unit to see if it is a good fit with the overall corporate strategy. Companies that do not fit the corporate strategy may be divested, while new companies that do fit the strategy may be acquired. By doing so, conglomerates can ensure that their portfolio of businesses is aligned with their overall goals and objectives.

Resource Allocation

Another important/effective strategy used by conglomerates to manage their diverse range of businesses and operations is resource allocation. This entails allocating capital, people, and technology to various business units based on their needs and priorities. Conglomerates can ensure that each business unit has the resources it requires to operate effectively and grow over time by doing so.

Process Standardization in Business

Business process standardisation may also be used by conglomerates to manage their diverse range of businesses and operations. This entails creating standard processes and procedures that can be used by all business units, regardless of industry or sector.By doing so, conglomerates can create a common language and set of practices that can help to improve efficiency, reduce costs, and improve quality across the entire organization.

Management of Talent

Another important strategy used by conglomerates to manage their diverse range of businesses and operations is talent management. This entails/consists of identifying and developing talent across the organization, regardless of the business unit. Conglomerates can ensure that they have a strong bench of leaders and managers who can take on new challenges and drive long-term growth by doing so.

Management of Risk

Finally, risk management is an important strategy used by conglomerates to manage their diverse set of businesses and operations. This entails identifying and assessing risks throughout the organisation, as well as implementing processes and procedures to manage and mitigate those risks.

Finally, managing/handling a diverse range of businesses and operations can be a difficult task that necessitates careful planning, coordination, and strategic decision-making. To manage their diverse range of businesses and operations, conglomerates may employ a variety of strategies, including decentralisation, centralization, portfolio management, resource allocation, business process standardisation, talent management, and risk management. Conglomerates can maximise their long-term growth and success by taking a thoughtful and strategic approach to managing their portfolio of businesses.

Returns are subject to market risk.

Past performance do not assure future returns.

Name: Algonauts Advisory Services Private Limited

Registration Number: INA000017277

Type: Non-Individual

Validity: Oct 28, 2022 - Perpetual

Contact Details (Principal Officer):

Mr.Sharad Sankaran:
(Principal Officer)
Algonauts Advisory Service Private Limited:
Email: principal.officer@algonauts.in
Contact Number: +91 8108832455
Address: 1, Dora Rose, I C Colony, Borivali West, Maharashtra, Mumbai 400103.

Contact details of SEBI office:

Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan, Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.

Disclaimer:

Algonauts Advisory Private Limited (Algonauts Advisory Private Limited) is an investment advisor engaged in the equity advisory business. Algonauts Advisory Private Limited is Sebi registered investment adviser. Algonauts Advisory Private Limited Research Analyst SEBI Registration Number - INA000017277. Algonauts Advisory Private Limited SEBI Registration INA000017277.
Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as such, may not match with the recommendation in fundamental reports. Investors may visit www.algonautsadvisory.in to view Technical Research Reports.
The information and opinions in this report have been prepared by Algonauts Advisory Private Limited and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of Algonauts Advisory Private Limited. While we would endeavour to update the information herein on a reasonable basis, Algonauts Advisory Private Limited is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent Algonauts Advisory Private Limited from doing so.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Algonauts Advisory Private Limited will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. Algonauts Advisory Private Limited accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.
Algonauts Advisory Private Limited or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.
Algonauts Advisory Private Limited encourages independence in research report preparation and strives to minimize conflict in preparation of research report. Algonauts Advisory Private Limited or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report.
Accordingly, neither Algonauts Advisory Private Limited nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Algonauts Advisory Private Limited or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.
Since associates of Algonauts Advisory Private Limited and Algonauts Advisory Private Limited as a entity are engaged in various financial service businesses, they might have financial interests or actual/ beneficial ownership of one percent or more or other material conflict of interest various companies including the subject company/companies mentioned in this report.
Algonauts Advisory Private Limited may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor Algonauts Advisory Private Limited have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on Algonauts Advisory Private Limited by any Regulatory Authority impacting Equity Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Algonauts Advisory Private Limited and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.