RELATBDNBSS OF RESOURCBS IN BUSINESS DIVBRSIFICATION: A RESOURCE.BASED VIEW (RBV) APPROACH TO MAXIMIZE CORPORATE ADVANTAGE

Successful companies that have many businesses in star and cash cow phase will not cease to expand their businesses. They understand well that if they do not diversify their business, all existing business that they have will go to the dog phase in the future and they have no business that can replace it. Therefore the question may come up in the mind of a business man is \"What should be the next business we in?� Moreover, when the companies diversify their businesses it should add value to the whole corporation, not only for the business itself. Then, when the companies choose to execute related diversification, the relatedness should be based on the resources not based on products. In addition, to do diversification strategy, company should have not only some strategic resources, but also all the strategic resources. Moreover, the company should understand the fit between parent and its businesses. If the parents fit with the businesses it will create value but if the parents misfit with the business, the parents will destroy value to the business. The company can exploit the resources by assessing the strategic resources that the company has characteristics valuable, rare, inimitable, slowly depreciated, appropriability, and substitutable. Then, the company analyzes the key success factor for each business and search for potential resource sharing. Another way to exploit their resources is by creating ecosystem as the platform to put all diversification executed the companies. This platform will lock customers this ecosystem and create high switching cost for them. This ecosystem also fulfills the resource as sustaining competitive advantage because of the isolating mechanism that makes the competitor cannot enter this ecosystem. Meanwhile, synergies can be done in many ways such as sharing capability, tangible and intangible resources, technological know-how, and so forth. However, more collaboration does not mean more synergy because sometimes it just destroys value. Therefore match the parenting fit with the business so that parent can contribute to create value for the corporation instead of destroying value. The company can use parenting fit matrix to assess their business portfolio so that they can decide which business has fit and misfit with the parent and take corporate action from it