Q.

1 Name and Explain the different corporate strategies

Þ Answer:
The types of corporate level strategies are:
• Expansion strategy
• Stability strategy
• Retrenchment strategy, and
• Re-invention strategy

Explanation :
Expansion strategy is adopted because
1. It may become imperative when environment demands increase in pace of
activity
2. Psychologically, strategists may feel more satisfied with the prospects of
growth from expansion: chief executives may take pride in presiding over
organizations perceived to be growth-oriented.
3. Increasing size may lead to more control over the market vis-à-vis
competitors
4. Advantages from the experience curve and scale of operations may accrue

Stability strategy is adopted because

1. It is less risky, involves fewer changes and people feel comfortable with things as
they are
2. The environment faced is relatively stable
3. Expansion may be perceived as being threatening
4. Consolidation is sought through stabilizing after a period of rapid expansion.

Retrenchment strategy is adopted because:

1. The management no longer wishes to remain in business either partly or whollydue to
continuous losses and inviability
2. The environment faced is threatening

Combination strategy is adopted because:

1. The organization is large and faces a complex environment.
2. The organization is composed of different business which lies in different industry
and require different response.

Q.2 Read and write a summary for the following article-

https://hbr.org/2017/11/great-corporate-strategies-thrive-on-the-right-amount-of-
tension

Þ Answer:
The gap between strategy and execution of it is called as Strategic Dissonance. “Yerkes-
Dodson Law” stated that as stress increases with performance level to a certain extent. It can
increase company’s performance to a point.
There are three zones which are used to manage strategic stress:
• Strategic Burnout (too much strategic stress). Strategic burnout can occur if
prophets and experts (that is, employees who enthusiastically work on projects outside
the predefined strategy) dominate the organization without the counterweight of
executors and gamblers, who drive projects related to the planned strategy (here,
executors implement low-risk strategic projects, and gamblers bet on high-risk
projects that are within the confines of the predefined strategy).
An example of strategic burnout can be found at Lego around 2004. The strategic
stress generated by these employees was enough to change the organization while not
moving it too far away from its original strategic domain.
• Strategic Boredom (not enough strategic stress): The concept of strategic boredom
does not necessarily suggest that the content of the strategy is boring, but that the
conformity and limited challenges give rise to the risk of strategic complacency,
which may result in rigid execution that is blind to emerging risks or opportunities.
• Strategic Sweet Spot (just the right amount of strategic stress). The optimal
amount of each will depend on the specific organization and the situation, and on
changes in technologies, customer needs, and the competitive context. An example of
the strategic sweet spot is documented in Gary Hamel’s study of a gang of unlikely
rebels who woke IBM up in time to catch the internet wave.

Q.3 Identify the strategy followed by Kitkat in Japan-

https://thestrategystory.com/2020/08/23/how-kitkat-japan-is-the-best-example-of-
adaptation-strategy/

Þ Answer:

KitKat followed expansion strategy for this market. They used the product development
strategy which is a part of Ansoff’s product matrix/product-market strategy.

Since they sell their product through local market which change their stock on a weekly basis
KitKat came up with different flavors (variants) for the same customer market. They focused
on regional flavors and packaging to gain advantage in the Japanese market.

Case study

Stability Strategy is adopted in this case study, and this is evident through the following
observations:

• The strategy for sale is stable and the owner is confident she does not want to sell in
multi-brand shops and rather adopted aa franchise-based model.
• The owner takes less risk and does not want to expand as she does not want to
compromise on the authenticity and quality of the ingredients

• She sees expansion as a threat as she believes she will lose control over the USP of
her brand, i.e, the quality of her ingredients

The following strategies are also implemented

• Expansion through Internationalization- the products are available in 120 countries, so

it means they are looking for expansion beyond the national boundaries and in high end
stores like Selfridges and Harrods

• Expansion through Digitalization- the products are sold on e-commerce website, so

they are expanding using a digital medium.