Constantinos C. Markides: Cost

Constantinos C. Markides is Cypriot business theorist. Explore interesting quotes on cost.
Constantinos C. Markides: 16 quotes1 like

“A fundamental part of any firm's corporate strategy is its choice of what portfolio of business to compete in. According to the academic literature, this decision should reflect the 'superiority' of related diversification over unrelated diversification… This is because related diversification presumably allows the corporate center to exploit the interrelationships that exist among its different businesses (SBUs) and so achieve cost and/or differentiation competitive advantages over its rivals.”

Constantinos C. Markides

Source: "Related diversification, core competences and corporate performance", 1994, p. 149

“We will argue that the long-run value of a related diversification lies not so much in the exploitation of economies of scope (asset amortization) - where the benefit is primarily short-term - but in allowing corporations to more cost efficiently expand their stocks of strategic assets. Relatedness, which opens the way for asset improvement, asset creation and asset fission, holds the key to the long-run competitive advantages of diversification. This means that in most cases, similarities in the processes by which strategic assets are expanded and new assets are created are more important than static similarities between the strategic assets that are the outcome of these processes.”

Constantinos C. Markides

Source: "Related diversification, core competences and corporate performance", 1994, p. 150

“It is important here to clarify the difference between 'strategic assets' and 'core competences.' Strategic assets are assets that underpin a firm's cost or differentiation advantage in a particular market and that are imperfectly imitable, imperfectly substitutable and imperfectly tradeable. These assets also tend to be market- specific. An example would be Honda's dealer network distributing and servicing its motorbikes. On the other hand, core competences are the pool of experience, knowledge and systems, etc. that can be deployed to reduce the cost or time required in creating or expanding the stock of strategic assets.”

Constantinos C. Markides

Source: "Related diversification, core competences and corporate performance", 1994, p. 164