NATIONAL INSTITUTE OF FASHION TECHNOLOGY

Patna

Dept.: MFM 3

Asignment

Subject: Strategic and Innovation management

Topic: Example of different types strategy

Submitted By: Submitted To:

Ritu Raj (MFM/19/844) DR. Vikash Kumar.

 Example Forward Integration -

 Myntra , an e-commerce company starts its own logistics service-

Myntra Logistics to reduce costs, improve turnover time and reach its

customers timely.

 A software company starts its own consulting and software

development services so that it does not have to depend on a network

of partners to help customer implement their products.

 Flipkart, an e-commerce company has its own customer service

functions instead of outsourcing them to improve customer experience.

 Example Backward Integration -

 Google is basically a search engine but lately it has expand its

business to owning server computers as a well designing its
components. It also owns its fibre optic cabling.
 Suppose there is a Car Company, XYZ which gets a lot of raw

material like iron and steel for making cars, rubber for seats,

pistons, engine, etc. from various suppliers. If this car Company

merges/ acquires the supplier of iron and steel .

 Tomato ketchup manufacturer purchasing a tomato farm

rather than buying tomatoes from the farmers.

 Example Horizontal Integration –

 JP Morgan Chase
The JP Morgan and Chase bank was a result of a merger between
Chase Manhattan Bank and JP Morgan Company for an all-stock
transaction of approximately $31 Billion. Chase Manhattan was the
third biggest banking company in the US, controlling an asset worth
roughly $396 Billion as compared to the $266 Billion of JP Morgan
Company. Together, the merged entity would have total assets worth
more than $650 Billion, putting them at the second position after
only Citigroup which had $800 Billion in assets. The deal was an all-
stock transaction, with Chase formally acquiring JP Morgan,
exchanging 3.7 shares for each of JP Morgan’s shares.

 Aditya Birla group

(initial business, Cement, chemical, pulp and fiber, textile and occupied pantaloon
which was from Future group .

 Marriott and Starwood

Marriott and Starwood were two renowned hotel chains all across
the globe. In 2016, Marriot acquired Starwood in a deal wherein the
Starwood shareholders were given 0.8 shares of the merged entity
against every Starwood share they held (0.8x acquisition ratio).Post-
merger, Marriott has access to over 6000 properties in about 125
countries. The biggest challenge that this deal faced was the merging
of the Loyalty programs of the 2 chains because of the different
benefits provided by each program. The merger was officially
completed, including the consolidation of the different Loyalty
programs into 1, by during the second half of 2018
 Example of Vertical integration:

 The Apple Model

Apple is one of the most significant vertical integration examples
because the company has controlled the manufacturing and
 distribution of its products from the time it was founded. Apple not
only sells computers, iPhones and iPads, but it also designs the
software that powers these products.

 Rajesh export

Rajesh Export (initial business gold work) – Wholesale marketing – Retail

showroom – Ecommerce business. Now (Gold mining - Refining – Designing
– Manufacturing)

 Intensive Strategies:

Example Market penetration:

Market penetration aims to increase market share in present markets through

greater marketing efforts.

 Nike features famous athletes in print and television ads designed to take
market share within the athletic shoes business from Addidas and other
rivals.

 McDonald's has pursued mket penetration in recent years by using Latino

themes within advertising. The firm also maintains language
http://www.meencanta.com ; the website's name is the Spanish
McDonald's lovin' it." McDonald's hopes gain customers through initiatives
such as this website. some of its a Spanish- website at translation slogan of
"I'm to more Latino costomer through initiatives such as this website.
  Apple: Apple is also promoting its products through various webpages and
websites and media outlets, thus helps in broadly capturing the market by
encouraging more people to buy Apple products.

Example of Market development:

Market development involves introducing present products or services into new

geographic areas.

 Asian Paints is primarily due to its excellent marketing strategies. The

company introduced small packs of paints and expanded the dealer
network, particularly in rural and semi-urban markets.
 Starbucks has a very aggressive effort to expand itself by offering 1000 of
stores across china and so far they have been very successful.
 Latest funding of OYO firepower to continue its aggressive overseas
expansion in china , west Asia and other markets

Example of Product development:

Product development is a strategy that seeks increased revenues by improving or

modifying present product or services. Product development usually entails large
research and development expenditure.

 1940’s Disney expanded its offerings within the film business by going
beyond cartoons and creating movie featuring real actors.
  Coca cola developed a new flavour sparkling drink by direct result of
listening to consumers who called the company’s careline telephone
service. The business conducted taste tests prior to the 2001 launch.

 Diversification strategies:
Example of Related diversification:

 Johnson & Johnson has diversified their business in medical and hygiene
like
Baby products(wipes , shampoos, cotton bud etc) ,Wound care(band
aid),Feminine hygiene (carefree, stayfree) & dental products
 Dettol: it also diversified their business in medical and hygiene(handwash,
liquid, soap, shower gel)

Example of Unrelated diversification:

 HubSpot: HubSpot diversified its software to cater for enterprise-level

needs. This saw it rise from $255,000 ARR in 2007 to a whopping $15.6
million in revenue by 2010. The company went public with its IPO in 2014,
raising an impressive $125 million and cementing the company’s market
value at around $880 million.
 Tata: TATA Group is a highly diversified entity with a range of business
under its fold.
 Textile Industry, Hospitality Industry (Establish Taj mahal hotel)Iron and
Steel industry(Tata Steel),(IIS Bangalore),Consumer goods, Aviation Sector ,
Chemical Industries, Telco, Engineering and manufacturing sector,
Beverage Industry, Export(Tata International), Service Sector (TCS)
  Virgin: Virgin Travel & virgin holidays, Virgin retail(Music and entertainment
), Virgin Investments(Computer products, Promotional blimps , property
development), Virgin hotel group (Clubs & hotels in UK , Spain & Virgin
Island), Virgin communication (Virgin Interactive Entertainment,
publishing ,Radio, Tv), Insurance Industry,

 Defensive strategies:

Defensive strategies are not intended to enhance a firm’s competitive advantage ,

instead they are used to help defend its competitive position.

Example of Retrenchment:

Cost and asset reduction to reverse declining sales and profit

 General Motors of the United States stopped producing a number of

"makes" of automobile. GM decided that it needed to retrench by
concentrating on just a few "makes." It hoped this would help it return to
profitability
 PepsiCo Overhaul Strategy: Cut 9000 jobs to save money and spend more into increased
marketing expenditure of 600 billon USD for better comeback where PepsiCo has been
losing its market share over last year.

Example of Divestiture
Selling a division or part of an organization

 Asian Bank Limited is a Commercial Bank providing branch banking, investment

banking, and payment services. The Bank is having a large investment in Land parcels
and investments in various companies listed on the local bourses.
  P&G Co.’s decision to look for a buyer for its Duracell, Pringles and coffee business ,
including Folgers , highlights P&G chief executive A.G. Lafley’s strategy of focusing
on fast growing , high margin businesses , particularly in health care and beauty.
 Lego’s turnaround strategy when management decided to divest its theme parks to
concentrate more on its core business of making toys.

Example of liquidation
 Flipkart, Binny Bansal and Sachin Bansal had a very successful 2018. In May of last
year, the 37-year-old entrepreneurs sold a majority stake in their Indian shopping site,
Flipkart, to U.S. retail giant Walmart for a record-breaking $16 billion.
 Imperial Sugar filed for Chapter 11 in 2001 and sold its Diamond Crystal Brands to
Hormel to help offset some of its debt. Louis Dreyfus commodities them acquired
Imperial Suger for $78 million in 2012.
 American car manufacturer Chrysler filed for bankruptcy in April 2009, about one month
before GM. Chrysler took $12.5 billion in government assistance, of which it repaid the
U.S. Treasury $11.2 billion. European carmaker Fiat (FCAU) purchased Chrysler in
January 2014.