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Lonrho Plc

Decent Essays

An evaluation of Lonrho’s corporate strategy should start from the two main key issues: in what businesses the firm should compete and how corporate headquarter should manage those businesses.
Lonrho’s profile in 1996 included Agriculture, Sugar, General Trade, Hotels, Manufacturing, Mining&Refining and Motor&Equipment. The level of diversification was clearly high and the firm was pursuing a unrelated strategy, with less than 70% of revenues that came from the dominant business (Mining ) and without common links between businesses.
The corporation was divided into country groups or related business lines and each division had a top manager whose responsibilities were similar to those of a group CEO. So the headquarter control of these …show more content…

Nevertheless I do not think that this corporate strategy is the best. This strategy is mainly concerned with making choices among the last two alternatives. So the corporation would be constrained to relinquish the enormous promise of African continent, or the 41% of mining profit if it chooses to focus in Lonrho Africa. ii) The firm can continue as a conglomerate but for the reason said above, also in this case Lonrho should leave the sugar market. Now we have two businesses left and I would like to make a comparison with the Boston Consulting Group chart. With this corporate strategy, the firm could use mining as a “cash cow” market, trying to exploit the high percentage of the revenues that comes from the asset. Than it can use this cash flow in Lonrho Africa, a proper “star” market, with its enormous promise but also with a lot of investments needed. So with its management expertise, technical skills and a respected name, mixed with new financial resources, Lonrho could undertake some projects in Africa that few other firms could. I think that these are the right actions that the firm should take in term of corporate

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