THE STRATEGIC MANAGEMENT PERSPECTIVE these conditions may affect the competitor's behavior, the following additional issues must be addressed:10 D parent firm's current results. such as for sales growth. rate of return. and so on parent firm's overall goals o importance of business unit to parent parent firm's reasons for entering the particular business. such as ex- cess capacity. need for vertical integration. wish to exploit distribu- tion channels. and so on o economic relationship between firm's units. such as vertical parent integration and shared R& D ri values or beliefs of top management o common generic strategies used by parent company sales targets, hurdles for return on investment, and constraints on capital due to the performance and needs of parent firm's other units diversification plans parent firm's organizational structure. including the relative status, position. and goals of particular unit control and compensation schemes for divisional management u type of executives commonly rewarded(which reinforces certain types of strategic behavior) recruiting strategy i antitrust. regulatory, or social sensitivities
n top management's emotional attachment to unit Insight can also be obtained by analyzing the parent firm's apparent portfolio strategy and noting how the competing unit fits. Key questions include the following: What criteria are used to classify businesses? U which businesses are classified as cash cows? n which businesses are likely to be harvested or divested? which businesses provide stability to offset fluctuations elsewhere in the portfolio? which businesses are positioned to protect other major businesses? o In which businesses is the parent likely to invest resources and at- tempt to build market share? Ibid.. pp. 53-S6. Ibid.. pp. 56-57.