According to Thompson & Strickland (2001), a company commits diversification just
to increase the company value for the benefit of their shareholders. In order to do so,
diversified companies have to achieve a better performance compared with each business
unit performance if they stand alone (stand alone enterprises). Several ways could be
taken when the company decided to diversify its business. One of them is by doing
mergers and acquisitions. However, acquisition also has the potential for failure.
Problems that are often found is difficulties in integration.
Synergy occurs when assets are used together to produce greater value when
compared with the use of separately by each company. To achieve synergies, companies
should be able to identify the level of balance between business units with the company
corporate.
One method that can be used to identify this is by using corporate parenting
framework (Goold, et al. 1995). This framework uses a structured analysis approach
(structured analytical approach) which consists of four main components to assess the
level of conformity that is described in parenting fit matrix, namely Critical success
factors, Parenting opportunity, characteristic Parenting, and Parenting fit matrix.
Mapping business unit on parenting fit matrix will describe the business unit's position in
the corporate portfolio into 5 main categories, namely Heartland Business, Edge of
Heartland Business, Business Ballast, Alien Territory Business, and Business Value Trap,
where each position has implications for strategies that different for future development.
After completing the identification, weighting and scoring process between business
units and parent company, found that the score for variable critical success factors
amounted to 4.0 and the score for variable parenting opportunites is 4.0. If the number is
in describing the parenting fit into the matrix, it will show that the company was in
territori edge of Heartland. Optimizing the benefits of which are owned by corporate
companies, retain talent you have, and continue to develop competitive products and
innovative is the miraculous way that can be done to win the competition