Many if not most organizations simultaneously pursue a combination of 2

or more strategies, but a combination strategy can be exceptionally risky if

not carried too far.  No organization can afford to pursue all the strategies
that might benefit the firm.  Difficult decisions must be made. Priority must
be established because organizations have limited resources.  Both
organizations and individuals must choose among alternative strategies and
avoid excessive indebtedness.
 

Alternative Strategies
 
INTEGRATION STRATEGIES
 

1. Forward Integration - is gaining ownership  or increased control

over  distributors or retailers. Increasing number of manufacturers
(suppliers) today  are pursuing this strategy  by establishing websites to
directly sell products to customers. This strategy is causing turmoil  in some
industries. An effective means of  implementing forward integration is
franchising.   Businesses can expand rapidly by franchising because costs
and opportunities are spread among many individuals.
 

2. Backward Integration - Seeking ownership or increased control   of a

firm’s suppliers.  This strategy can be especially  appropriate when a firm’s
current suppliers are unreliable, too costly, or cannot meet the firm’s needs.
 

3. Horizontal Integration - seeking ownership or increased control over

competitors. Mergers, acquisitions, and takeover among competitors allow
for economies of scale and enhanced transfer   of resources and
competencies.
 
                     INTENSIVE STRATEGIES
 

4. Market Penetration - seeking increased market share for

present products or services in present markets through greater marketing
efforts. This includes increasing the number of salespersons, increasing
advertising expenditures, offering extensive sales promotion items, or
increasing publicity efforts.
 

5. Market Development - is introducing present products or services   into

new geographic area. This strategy is effective when an organization is very
successful  at what it does and its basic industry  is rapidly becoming global
ins cope.
 

6. Product Development - seeking increased sales  by improving products

or services or developing new ones.  This usually entails   large research and
development  expenditures.  This strategy is especially effective when an
organization has successful products   that are in the maturity stage of the
product life cycle where the idea is to attract satisfied customers  to try new
(improved) products  as a result of their positive experience  with
the organization’s present  products or services.
 
                   DIVERSIFICATION STRATEGIES
 

7. Related Diversification - adding new but  related products or  This

strategy is effective when an organization competes in a no-growth  or a
slow-growth industry.
 

8. Unrelated Diversification - is adding new unrelated  products or An

unrelated diversification  strategy favors capitalizing   on a portfolio of
businesses that are  capable of delivering   excellent financial performance in
their respective industries.
 
                        DEFENSIVE STRATEGIES
 

9. Retrenchment Strategy - regrouping through cost  and

assets reduction  to reverse declining sales  and profits.  This is sometimes
called turnaround or reorganizational strategy.  This designed to fortify  an
organization’s basic  distinctive  This is effective when an organization is one
of the weaker competitor in a given industry.
 

10. Divestiture Strategy - is selling a division or part of an  Divestiture is

often used to raise capital for further   strategic acquisitions or investments.
 

11. Liquidation- selling all of a company’s assets, in parts, for

their tangible worth.  This can be an emotionally difficult strategy, but it
maybe better to cease operating than to continue losing  large sums of
money