SHANTO – MARIAM UNIVERSITY OF CREATIVE TECHNOLOGY

(SMUCT)
Faculty of Management & General Studies
Department of Business Administration
Program: BBA
Assignment
Module Title: Project Management & Appraisal
Module Code: FIN-3205

Submitted by:
Name: JANNATUL SARA SHAROTHY
ID: 181401080
Batch: 48th
Semester: 8th

Submitted To:
Name: FARHANA YESMIN LIZA
Assistant Professor
Department of Business Administration, SMUCT
 Assignment: 1
1. Show schematically how strategies are formulated on a concept
advanced by Kenneth R. Andrews.

Answer: “Strategy” is the main concept of the contemporary era [1] that
has come to replace previous management activities such as
“administration” or “pacification. According to Kenneth Andrews
"Corporate strategy is the pattern of decisions in a
company that determines and reveals its objectives, purposes, or goals,
produces the principal
policies and plans for achieving those goals, and defines the range of
business the company is to
pursue, the kind of economic and human organization it is or intends to
be, and the nature of the
economic and non-economic contribution it intends to make to its
shareholders, employees,
customers, and communities." This definition of Andrews clearly states
that a business strategy is
connected with plans, actions, and vision. Therefore, to achieve the
goals of organizations, they
should have well-developed strategies..”
2. Discuss various Strategies for growth, stability, and contraction.

Answer:
Growth strategies: Growth strategy allows companies to expand their
business. Growth can
be achieved by practices like adding new locations, investing in
customer acquisition, or expanding a product line. A company's industry
and target market influences which growth strategies it will choose.
Concentration: Concentrated growth is the strategy of the firm that
directs its resources to the. Profitable growth of a single product in a
single market, with a single dominant technology. The main rationale
for this approach, sometimes called a market. Penetration or
concentration strategy is that the firm thoroughly develops.
Vertical Integration: A vertical integration refers to the integration of
firms in successive stages in the same industry. The integration of
different levels/stages of the industry is known as vertical integration.
Vertical integration may be either backward integration or forward
integration.
Diversification: A company may decide to diversify its activities by
expanding into markets or products that
are related to its current business. For example, an auto company may
diversify by adding a new car
model or by expanding into a related market like trucks.
• Concentric diversification involves adding new products that have
technological or marketing synergies
with existing product lines or industries, but appeal to new customers.
For example, a PC manufacturer
starts producing laptops. You may be able to leverage your existing
technologies, equipment and
marketing to diversify in this way.
Stability strategy: Stability strategy is a strategy in which the
organization retains its present strategy at
the corporate level and continues focusing on its present products and
markets. The firm stays with its current business and product markets;
maintains the existing level of effort; and is satisfied with Incremental
growth.
Contraction strategies: Contraction strategies decrease the size or
scope of operations for an
organization either at the corporate level or business level. Contraction
strategies include divestiture,liquidation, harvesting, and retrenchment.
With divestiture, an operating unit is sold off as a result of a
decision.
Divestiture: One divestiture strategy involves the sale of the subsidiary
or business line to another
company. ... By selling the business or its assets, the parent can obtain
capital to use to acquire another
company or assets that better fit with its current strategy. Sometimes
unsolicited buyers will approach to
buy the subsidiary.
Liquidation: Liquidation Strategy. Definition: The Liquidation Strategy
is the most unpleasant strategy adopted by the organization that
includes selling off its assets and the final closure or
winding up of the business operations.
 3. What are the principal motivations and likely impact of various
strategies on profitability, growth, and risk?
Answer: The principal motivations and likely impact of various
strategies on profitability, growth, and risk graphically shown
below:
Strategies Principal Likely Outcomes
Motivations Profitabilit Growth Risk
y
Concentration - Ability to serve a High Moderate Moderate
growing market
-Familiarity with
technology and
market
-Cost leadership

Vertical -Greater stability for High Moderate Moderate

integration existing and
proposed operations
-Greater market
power
Concentric -Improved utilization High Moderate Moderate
diversification of resources
Conglomerate Limited scope in the Moderate High Low
diversification present business
Stability -Satisfaction with High Low Low
status quo
Divestment -Inadequate profit High Low Low
-Poor strategy