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Cinderella business

Derek F. Channon


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Such a business is one with opportunity, but which fails to receive the resources or attention it deserves. Examples are found when such businesses are located within divisions that the corporate center has designated as mature or declining, and has therefore deprived of resources overall. In these circumstances, growth Cinderella businesses act as a threat to the existing divisional operations, as to reach their potential they require a disproportionate percentage of resources allocated to the division as a whole. In large corporations in which scale is such that small business units tend to get lost in the overall corporate structure, the position can become acute. Similarly, small‐growth businesses were given little or no attention in industries such as oil when their size did not justify attention at board level and, as a result, many such diversification moves by acquisition have failed. Cinderella businesses often occur as a result of acquisition strategies ( see acquisition strategy ) in which firms attempt to diversify into growth markets with relatively small‐scale, tentative moves, especially when moving into unrelated areas of industry. While sanctioned by the main board in large, diversified, and especially dominant business concerns ( see dominant business strategy ), such moves receive little or no attention in terms of main board reporting relationships. In oil, ... log in or subscribe to read full text

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