B) STABILITY STRATEGIES

A corporation may choose stability over growth by continuing its current activities
without any significant change in direction. Although sometimes viewed as lack of
strategy, the stability family of corporate strategies can be appropriate for a
successful corporation operating in a reasonably predictable environment.
(i) Pause/Proceed With Caution Strategy In effect, a time out or an
opportunity to rest before continuing a growth or retrenchment strategy. It is
a very deliberate attempt to make only incremental improvements until a
particular environmental situation changes. It is typically conceived as a
temporary strategy to be used until the environmental becomes more
hospitable or to enable a company to consolidate its resources after
prolonged rapid growth.
(ii) No Change Strategy Is a decision to do nothing new (a choice to
continue current operation and policies for the foreseeable future). Rarely
articulated as a definite strategy, a no change strategys success depends on a
lack of significant change in a corporations situation. The relative stability
created by the firms modest competitive position in an industry facing little
of no growth encourages the company to continue on its current course.
Making only small adjustments for inflation in the sales and profit
objectives, there are no obvious opportunities or threats nor much in the way
of significant strengths of weaknesses. Few aggressive new competitors are
likely to enter such an industry.
(iii) Profit Strategy Is a decision to do nothing new in worsening situation
but instead to act as though the companys problems are only temporary. The
profit strategy is an attempt to artificially support profits when a companys
sales are declining by reducing investment and short term discretionary
expenditures. Rather than announcing the companys poor position to
shareholders and the investment community at large, top management may
be tempted to follow this very seductive strategy. Blaming the companys
problems on a hostile environment (such as anti-business government
policies) management defers investments and / or buts expenses to stabilize
profit during this period.