Strategies in Action PowerPoint Presentation

Strategies in Action
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  Strategies in action (Strategic Management)

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  Strategies in action 1.CORPORATE STRATEGY Corporate-level strategy is often called the portfolio-level strategy because board-level decisions are usually concerned with acquisitions, mergers, major expansions, and divestitures that add to or reduce product lines

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  There are many types of strategies that can be pursued to gain a specific sense of overall direction at the corporate and business levels. These four "grand" or "major" strategies fall into four major categories: Growth: Pursuit of increased organizational size through expanded operations. Retrenchment: Pursuit of reduced organizational size through operations cutbacks. Stability: Pursuit of the status quo, or present course of action. Combination: Pursuit of two or more strategies at the same time.

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  1-1. TYPES OF GRAND STRATEGIES Alternative strategies that an enterprise could pursue can be categorized into thirteen actions: forward integration, backward integration, horizontal integration, market penetration, market development, product development, concentric diversification, conglomerate diversification, horizontal diversification, joint venture, retrenchment, divestiture, liquidation, and a combination strategy. Each alternative strategy has countless variations.

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  TYPES OF GRAND STRATEGIES

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  1/ GROWTH STRATEGY (1/3) Some organisation try to grow inernally through some form of concentration. That is by using existing strenghs in new and productive ways but with out taking the risk of great shift. A second set of growth strategies is through some form of diversification . The acquisition of new businesses in related or unrelated areas, or investment in new ventutres.

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  1/ GROWTH STRATEGIE (2/3) FORWARD INTEGRATION: involves gaining ownership or increased control over distributors or retailers. BACKWARD INTEGRATION: it is a strategy of seeking ownership or increased control of firm’s suppliers. HORIZONTAL INTEGRATION: refers to a strategy of seeking ownership or increased control over a firm’s competitors.

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  1/ GROWTH STRATEGIE (3/3) MARKET PENETRATION : The purpose of this strategy is to increase sales of product in an existing market through the use of more aggressive marketing tactics, especially pricing. MARKET DEVELOPMENT: it consists on radical modifications of existing product or the creation of new ones with new characteristics that satisfy newly defined needs. CONCENTRIC DIVERSIFICATION: Adding new but related products or services is widely called concentric diversification. HORIZONTAL DIVERSIFICATION: Adding new unrelated products or services for present customers is called horizontal diversification . CONGLOMERATE DIVERSIFICATION: Adding new , unrelated products or services is called conglomerate diversification . Some firms pursue conglomerate diversification based in part on an expectation of profits from breaking up acquired firms and selling divisions piecemeal.

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  JOINT VENTURE STRATEGY: Joint venture is a popular strategy that occurs when two or more copanies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.

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  2/ TURNAROUND STRATEGIES ( or Defensive strategies) (1/3) Turnaround strategies attempt to revitalize business in a slump. They involve a combination of cost-cutting and revenue –enhancing strategies. Four turnaround options exists: Cost-cutting strategies: if the firm has high direct labour costs, high fixed expenses, or is close to the break-even point, cost-cutting may be appropriate.

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  2/ TURNAROUND STRATEGIES ( or Defensive strategies) (2/3) Asset-reduction strategies: may be needed if the firm is far from its break-even point, since there is no way to out costs sufficiently. Assets or capacity unneeded in the next two years or so should be the first to go. Revenue-increasing strategies: If the firm is close to covering its fixed costs and has low variable costs, revenue increasing approches such as price increases may be more beneficial.

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  2/ TURNAROUND STRATEGIES ( or Defensive strategies) (3/3) Combination strategies: If the firm is covering fixed costs but significantly below its break-even point, a combination of the previous three approches may be more fruitful.

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  DIVESTITURE Selling a divison or part of an organisation is called divestiture. It is often used to raise capital for further strategic acquisitions or investment.

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  LiQUIDATION Selling all of a company’s assets, in parts, for their tangible worth is called liquidation. Liquidation is recognition of defeat and consequently can be an emotionally difficult strategy.

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  3/ STABILITY STRATEGY A stability strategy is characterized by an abscene of significant change. It involves maintaining the status quo or growing in a methodical but slowmanner.

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  4/ COMBINATION STRATEGY A combination strategy is the pursuit of two or more of the previous strategies simultaneously. For exemple, one business in the company may be pursuing growth while another in the same company is contracting.

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  I I ) BUSINESS LEVEL STRATEGIES Two frameworks in wich business units formulate strategy are the adaptive typology and Porter’s competitive strategies.

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  1/ ADAPTIVE STRATEGIES Miles and Snow’s Adaptive Strategies

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  2/ Porter’s generic strategies

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  THANK YOU