Acid Tests of Corporate Advantage

This case presents a way to test the efficacy of a firm's corporate diversification strategy or its corporate advantage. In this context, the performance of several lines of business is considered simultaneously within a corporate family; comparisons are made with other diversified firms that compete with the firm for capital. This case expands upon the corporate advantage paradigm of Collis & Montgomery through six tests that consider the underlying and moderating forces of fit and intervention in operations in order to arrive at a corporate strategy which is balanced on all dimensions and creates the desirable outcomes of superior competitive advantage.