Interview: Hamilton Helmer & Chenyi Shi on How to Build an AWS-Like Second Business
Acquired
Business and Corporate Strategy in Multi-Business Unit Corporations
Business strategy focuses on finding power in a defensible entity, while corporate strategy deals with strategy in a multi-business unit corporation. The central issue in corporate strategy is determining whether the overall value of having multiple businesses under the same roof is greater than their individual values. The historical perspective shows that diversification benefits in wildly diversified companies like GE turned out to be untrue. The key question is why having one business makes sense for another. For example, Amazon's AWS is interesting because of the synergy where one plus one is greater than two. The dynamic aspect of corporate strategy involves leveraging existing business capabilities to succeed in new ventures, as seen with Amazon's transition into AWS by utilizing its pre-existing capabilities.
