Resource Allocation


Resources to SBUs can be allocated using: ◦ The BCG Growth-Share Matrix



Africa. US etc.g.Strategic Planning for Intensive Growth: Product-Market Expansion Grid (Ansoff’s Matrix) Existing Products Existing Markets New Markets Market Penetration (e.g.) Diversification Strategies . Scorpio being exported to S. introduction of sachets) New Products Product Development Market Development (e.

. (LAIL) to get raw material source of recycled lead and lead alloys for making storage batteries. ◦ Exide Industries has picked up a 51% stake in Leadage Alloys India Ltd. manufacturers of printing & writing paper and newsprint has set up a captive plantation to meet its material requirements.Acquiring Suppliers ◦ Gas Authority of India Ltd (GAIL) has invested in 29 exploration blocks and three coal bed methane (CBM) blocks ◦ Tamil Nadu Newsprint and Papers (TNPL).Integrative Growth  Backward integration.

Acquiring Buyers ◦ National Mineral Development Corporation (NMDC). a solar panel manufacturer.Integrative Growth (Cont…):  Forward Integration . . is leapfrogging into steelmaking by investing Rs 16.000 crore in a new plant in Chhattisgarh that will have an annual capacity of four million tonnes ◦ XL Telecom. is going to establish a grid connected ‘solar farms’ in Spain and Portugal with an investment of Rs 1. from mining iron ore.000 crore.

Acquiring Competitors ◦ ◦ ◦ ◦ ◦ ◦ ◦ HP acquires Compaq Jet acquires Air Sahara Tata steel acquires Corus Mittal steel acquires Arcelor Hindalco acquires Novelis Videocon acquires Thomson’s CPT plant Videocon acquires Daewoo Electronics .Integrative Growth (Cont…):  Horizontal Integration .

Diversification Growth:  Concentric Diversification Strategy: Technological/marketing synergy with existing product line that may appeal to different group of customers. Tata Motors going in for Nano. ◦ E. IIMs offering Executive MBAs  Horizontal Diversification Strategy: Technologically unrelated products that could appeal to current customers. ◦ E. Microsoft key-board and mouse .g.g.

Diversification Growth (Cont…):  Conglomerate Diversification Strategy: No relation to company’s current technology. ◦ Tata group manufactures cars as well as salt ◦ Godrej group manufactures soaps as well as furniture ◦ ADAG is into telecommunications as well as financial services ◦ Aditya Birla group is into manufacture of textiles as well as cement . product or market.

Strategic Alliances:     Product or Service Alliance Promotional Alliance Logistics Alliances Pricing Collaborations .


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Business Strategic Planning Planning Involves Eight Steps: Business Mission  SWOT Analysis: Internal  SWOT Analysis: External  Goal Formulation  Strategy Formulation  Program Formulation  Implementation  Feedback and Control  .