MGT510 SEU Aramco’s Corporate Strategy for Diversification Essay

Critical Thinking: Corporate Strategy for Diversification (105 points)

Diversification strategies raise a wide range of strategic management issues. For this assignment, analyze Aramco company whose strategy includes or included diversification and explore their motives, competitive advantage, and strategic planning based on the topics from Chapter 12.

1. Identify and provide Aramco’s strategic details. 

2- What circumstances existed that motivated this company to diversify (Here you can find the answer in the book; chapter 12 page 299. It’s written on page 299 that there are two Motives for Diversification which are: growth and risk reduction. You can write on both of them and link them to the Aramco company).

3. What mode of diversification did the Aramco adopt?

4. How does this relate to their resources and capabilities? ( You have to mention the relationship between diversification decisions and Aramco’s resources and capabilities).

5. What are the benefits of diversification in this industry and how significant are they in the shape and growth of the industry?

6. What are the implications of the strategy chosen for the:

a- organizational structure, 

b- management systems, 

c- and allocation of decision making within the diversified firm?

• (Hint: diversification of the company could be through a merger with SABIC, shares during an initial public offering (IPO), diversify into chemicals and natural gas, or others).