Coca-Cola recently signed a 10-year
partnership with Green Mountain Coffee
Apple is basically
diversifying into the banking
business with new products
(Apple Watch)
Mars Inc. purchasing 80 percent
of Procter & Gamble’s pet-food
brands for $2.9 billion
Cisco Systems recently
removed 6,000 employees from
its payrolls, comprising 8
percent of the company’s total
workforce
Procter & Gamble (P&G) divest
Ivory (producing bar soap) as
Americans have increasingly
opted for body washes and
liquid hand soap
Crumbs Bake Shop (cupcakes)
filed for Chapter 10 bankruptcy
liquidation of its 65 stores in 12
states and Washington
Value chains possess competitively Related
valuable cross-busin strategic fits
Diversification
value chains are dissimilar and Unrelated
not competitive Diversification
regroups through cost and asset
reduction to reverse declining sales
and profits
Selling a division or part of an
organization that are unprofitable, that
require too much capital, or that do not
fit well with the firm’s other activities
Selling all of a company’s assets, in
parts, for their tangible worth
Roasters, maker of the Keurig single-serve
coffeemaker, to offer for the first time a
Forward gaining ownership or increased Coca-Cola drink through a K-Cup
Integration control over distributors or
retailers.
127 Dell establishes website for customer to
order their PC (direct sales)
Diversification
Strategies 132 Integration Franschaising - Burger King
Strategies
Backward Constellation (wine & beer producer)
seeking ownership or increased acquired a controlling interest in a
Integration control of a firm’s suppliers Mexican Anheuser-Busch glass-bottle
128 factory
Retrenchment Types of Strategies Horizontal
Seeking ownership of or control Microsoft acquire Skypes for the internet
Integration 129 over a firm’s competitors communication technology
Defensive
The new Apple Watch is actually a wrist-top
Divestiture Strategies Product seeks increased sales by improving
computer, and now competes with
or modifying present products or
133 Development 131 various Android-powered devices from
services
Motorola and Samsung Electronics
Netflix, recently launched it services into
Liquidation Intensive Market introducing present products or France, Germany, Belgium, and
services into new geographic areas. Switzerland, as well as eastern and
Strategies Development 130
southern Europe
increase market share for present
Gap uses a handsome couple in a billboard,
Market products or services in present
and Jeremiah Brent and Nate Berkus appear
Penetration 130 markets through greater marketing
in a Banana Republic advertising campaign.
efforts
Types of Strategies
1. Integration Strategies
1.1. Forward Integration 127

1.1.1. gaining ownership or increased control over distributors or retailers.

1.1.1.1. Coca-Cola recently signed a 10-year partnership with Green Mountain Coffee Roasters,
maker of the Keurig single-serve coffeemaker, to offer for the first time a Coca-Cola drink through
a K-Cup

1.1.1.2. Dell establishes website for customer to order their PC (direct sales)

1.1.1.3. Franschaising - Burger King

1.2. Backward Integration 128

1.2.1. seeking ownership or increased control of a firm’s suppliers

1.2.1.1. Constellation (wine & beer producer) acquired a controlling interest in a Mexican
Anheuser-Busch glass-bottle factory

1.3. Horizontal Integration 129

1.3.1. Seeking ownership of or control over a firm’s competitors

1.3.1.1. Microsoft acquire Skypes for the internet communication technology

2. Intensive Strategies
2.1. Product Development 131

2.1.1. seeks increased sales by improving or modifying present products or services

2.1.1.1. The new Apple Watch is actually a wrist-top computer, and now competes with various
Android-powered devices from Motorola and Samsung Electronics

2.2. Market Development 130

2.2.1. introducing present products or services into new geographic areas.

2.2.1.1. Netflix, recently launched it services into France, Germany, Belgium, and Switzerland, as
well as eastern and southern Europe

2.3. Market Penetration 130

2.3.1. increase market share for present products or services in present markets through greater
marketing efforts

2.3.1.1. Gap uses a handsome couple in a billboard, and Jeremiah Brent and Nate Berkus appear
in a Banana Republic advertising campaign.

3. Defensive Strategies 133

3.1. Retrenchment

3.1.1. regroups through cost and asset reduction to reverse declining sales and profits
 3.1.1.1. Cisco Systems recently removed 6,000 employees from its payrolls, comprising 8 percent
of the company’s total workforce

3.2. Divestiture

3.2.1. Selling a division or part of an organization that are unprofitable, that require too much capital, or
that do not fit well with the firm’s other activities

3.2.1.1. Procter & Gamble (P&G) divest Ivory (producing bar soap) as Americans have
increasingly opted for body washes and liquid hand soap

3.3. Liquidation

3.3.1. Selling all of a company’s assets, in parts, for their tangible worth

3.3.1.1. Crumbs Bake Shop (cupcakes) filed for Chapter 10 bankruptcy liquidation of its 65 stores
in 12 states and Washington

4. Diversification Strategies 132

4.1. Related Diversification

4.1.1. Value chains possess competitively valuable cross-busin strategic fits

4.1.1.1. Apple is basically diversifying into the banking business with new products (Apple Watch)

4.2. Unrelated Diversification

4.2.1. value chains are dissimilar and not competitive

4.2.1.1. Mars Inc. purchasing 80 percent of Procter & Gamble’s pet-food brands for $2.9 billion