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The decision-making process behind strategic expansion into new business areas

Knutsson, Markus LU (2024) MIOM05 20242
Department of Mechanical Engineering Sciences
Production Management
Abstract
Companies face the strategic challenge of expanding into adjacent markets or areas. This often requires a choice between building internally, acquiring through purchases, or forming partnerships to address the opportunity. While extensive literature exists on each of these options individually, there is limited research on the decision-making process that evaluates all these alternatives collectively. This thesis seeks to address this gap by exploring the process and the factors that influence it.
Through an abductive approach that combines a literature review with interviews conducted at a company actively engaged in these decisions, this exploratory study examines the key factors affecting the decision-making process. The findings... (More)
Companies face the strategic challenge of expanding into adjacent markets or areas. This often requires a choice between building internally, acquiring through purchases, or forming partnerships to address the opportunity. While extensive literature exists on each of these options individually, there is limited research on the decision-making process that evaluates all these alternatives collectively. This thesis seeks to address this gap by exploring the process and the factors that influence it.
Through an abductive approach that combines a literature review with interviews conducted at a company actively engaged in these decisions, this exploratory study examines the key factors affecting the decision-making process. The findings reveal that this process can be divided into three main areas: decision formation, evaluation of alternatives, and company culture, all of which significantly impact the outcome.
The study concludes that the process is not linear but rather develops organically, with potential alternatives being evaluated in silos rather than compared directly with one another. Furthermore, company culture and individual biases play a critical role in determining which alternatives are prioritized and advanced within the process. Understanding these dynamics can provide companies with valuable insights to improve and facilitate their decision-making processes. (Less)
Popular Abstract
We often like to imagine that decision-making in companies follows a rational, step-by-step process, guided by logic and clear rules. However, a thesis from Lund University challenges this classic view, suggesting that corporate decision-making is far less orderly. Instead of a linear, rational approach, the thesis describes a much more chaotic process underlying how decisions are made.
Please use this url to cite or link to this publication:
author
Knutsson, Markus LU
supervisor
organization
course
MIOM05 20242
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Build, buy or partner, M&A Strategy, Strategic expansion, Decision-making process
other publication id
24/5297
language
English
id
9178736
date added to LUP
2024-12-17 12:24:24
date last changed
2024-12-17 12:24:24
@misc{9178736,
  abstract     = {{Companies face the strategic challenge of expanding into adjacent markets or areas. This often requires a choice between building internally, acquiring through purchases, or forming partnerships to address the opportunity. While extensive literature exists on each of these options individually, there is limited research on the decision-making process that evaluates all these alternatives collectively. This thesis seeks to address this gap by exploring the process and the factors that influence it.
Through an abductive approach that combines a literature review with interviews conducted at a company actively engaged in these decisions, this exploratory study examines the key factors affecting the decision-making process. The findings reveal that this process can be divided into three main areas: decision formation, evaluation of alternatives, and company culture, all of which significantly impact the outcome.
The study concludes that the process is not linear but rather develops organically, with potential alternatives being evaluated in silos rather than compared directly with one another. Furthermore, company culture and individual biases play a critical role in determining which alternatives are prioritized and advanced within the process. Understanding these dynamics can provide companies with valuable insights to improve and facilitate their decision-making processes.}},
  author       = {{Knutsson, Markus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The decision-making process behind strategic expansion into new business areas}},
  year         = {{2024}},
}