Corporate Theory

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When strategy lacks a theory, the company’s share will significantly decrease overtime. There are companies in like AT&T that model a strategy that lacks a theory. AT&T in 1984 eliminated several assets in which failed to uniquely apply new types of assets. The company failed to provide the three ingredients that compose a growing company. The company was unsuccessful in creating growth so AT&T created a second theory in hopes of growth. This time the company was missing foresight and cross-sights. On the contrary, Mittal, a small mill located in Indonesia could create direct reduced iron. Direct reduced iron is a substitute for scrap metal and is made of exceptional quality. The company sought out to buy a troubling steel company located in Trinidad. Mittal had experience and knowledge, which managed to turn the Trinidad mill around. The company knew how to create value by understanding the business in poor countries where the steel is in very high demand.

Todd Zenger has created an immaculate theory compared to the two different theories we have previously learned. Big companies such as Apple and Disney have both carried themselves to create products that we demand in our day-to-day lives. They have both created value in their companies and implemented three theories into their corporate theory of value creation. I think that this theory speaks for itself and is the foundation of any great innovating company. The possibilities are endless when creating the theory, for example Disney has several elements or cross-sights that help growth in the company. When creating an excelling company a manager must first sit down and create a well-developed corporate theory. The company that creates great value will be a one in which will create exponential growth.