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The Grand Strategic alternatives are
6 Stability
6 Retrenchment
6 Expansion
6 Combination
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a   
d ½hen an organization adopts strategy independent to other
its internal
d In association with other entity its external
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d Related or unrelated to existing business.
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d Serving additional CG or CF,
d Expansion or contraction of existing business startegy.AS
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d £ffensive strategy in anticipation of environmental threat
d Defensive strategy as a reaction to the environment


   
6 a  
º Ño change
º Pause/proceed with caution
º Profit strategies
6 ©  
º Through concentration
º Through integration
º Through diversification
º Through cooperation
º Through internationalization


6 {  
º Turnaround
º Divestment
º Liquidation
6    
º Simultaneous
º Sequential
º Combination of both

 


 
6 It is adopted by organization when it attempts at an
incremental improvements of its functional performance by
marginally changing one or more of its business in terms of
their respective
6 customer group
6 customer function and
6 alternative technologies.
6 The company stays with the current business & products ,
markets
6 Maintains existing level of efforts
6 Is satisfied with incremental growth
[     
 
 


6 Less risky
6 Fewer changes
6 Environment faced is relatively stable
6 Expansion may be perceived as threatening
6 Better deployment & utilization of resources
6 Ñot redefining business
6 Safety oriented
6 Ño fresh investments
6 Does not nil growth, but it is incremental

   
 
 


6 Enjoys comfortable position
6 Future is ensured
6 Growth ambitions are modest
6 Ñiche's prefer mostly

6 E.g.:
6 Copier machine provides better after sales service to
its existing customer to improve its company image
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6 Continues with the same business definition
6 The environment is predictable & certain
6 Ño opportunities & threats in environment
6 Ño major strength & weakness
6 Ño new competitors
6 Ño obvious threat of substitute
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6 Ño firm can identically continue with no change.


6 Sometimes things do change & the firm has to face
situation where it has to do something.
6 ½hen there occur temporary changes or problems the firm
tries to maintain the profits
6 The problems could be: economic recession, govt.
attitude, industry downturn, competitive pressure.
6 These problems are short run only
6 If problem continues has to adopt another strategy
è  è   
6 Firms which wish too test the ground before moving ahead
with full fledged strategy.
6 £r may have had a blistering phase of expansion & now
wish to rest for a while before moving ahead.
6 Purposes to let the strategic changes seep down the
organization levels, allow structural changes to take place,
and let the systems adopt new strategies.
6 ½hile profit strategies are enforced choices aimed at
sustaining profitability
6 Pause/proceed are deliberate and conscious attempt to
adjourn major strategic changes to a more opportune time,
or when the firm is ready to move on with rapid strides
again
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6 Expansion becomes imperative when envt.
Demands increase in the pace of activity.
6 Increasing size may lead to more control over the
market
6 Advantages from experience curve & economies
of scale
6 High risk
6 Redefinition of business
6 Fresh investments new business/ product/ market
6 Highly versatile strategy
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6 Applies to situation where the firm finds expansion
worth while.
6 It¶s the 1st preferred strategy
6 Entering into known business
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6 Involve minimal org. change so there is less
threatening
6 Managers comfortable with present business
6 enables the firm to master in business by the depth of
the knowledge.
6 Can develop competitive advantage.
6 Past experience is valuable.
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6 Marketing related:-similar type of product is offered with help
of unrelated technology . sewing machines produces diversify
into kitchenware & house hold appliances, sold to housewives
through a chain of retail stores.
Technology related:- a leasing firm provides hire- purchase
services.
  
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6 Enables firm to attain synergy by exchange of
resources & skills.
6 Avail economies of scale
6 Reduction in risk by spreading risk
6 Disadvantages:-
6 Increase risk & commitment
6 Diversion of resources & concentration to other areas.
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d Mergers
d Take overs
d Joint ventures
d Strategic alliances

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d Combination of 2 or more than 2 entities involved in which
one acquires the assets & liabilities of other in exchange of
cash or shares .
d £r both the organizations are dissolved, assets & liabilities
combined & new stock is issued.
d £bjectives of the firms are matched
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6 Increase value of firm¶s stock
6 Increase growth rate & make a good
investment
6 Improve stability of earning sales
6 To balance, complete & diversify product
lines.
6 Reduce competition
6 Take advantages of synergy
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d ´uick growth
d Reducing competition
d Increasing market share
d Creating goodwill

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Pros & cons:-


d Growth
d Mobility of resources
d Sick units betterment
d Stress strain
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d £ne cant do alone
d Risk is to be shared
d Competitive advantage of both can be brought together.

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d Foreign technology
d Govt. Policy & support
d Ñew fields
d Synergistic effect

 
 
d Coordination lacking
d Foreign regulations
d Cultural & behavioral differences
    
6 Two or more firms unite to pursue a set of agreed
upon goals but remain independent.
6 ½in -½in strategy
6 Share strength
6 Lend power to enterprise
6 Pooling of resources
6 Risk is mutual
6 E.g. TVs Suzuki, Mahindra ford, bpl SAÑ £,
Videocon Suzuki.
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6 Pro active (low interaction/low conflict)
6 Inter industry, vertical value chain integration
6 Ñon competitive(high interaction/low conflict)
6 Intra industry , non competitive firms
6 Competitive: (high interaction/high conflict)
6 Rival firms to cooperation , inert/ intra industry
6 Pre competitive: (low interaction high conflict)
6 Unrelated industries, new product development.
- 
6 Entering new markets
6 Reducing manufacturing costs
6 Developing & diffusing strategy
   
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d Competitive advantage of nations
d Factor Conditions
d Demand Conditions
d Related & Supporting Industries
d Firm strategy, Structure & Rivalry
d Beyond Domestic Market
d Asses Environment
d Evaluate capabilities
d Devise strategy.
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d Expansion
d Market potential
d Govt. policies
d Resources
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d Cost pressure
d High | 
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d Low 
 


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d   
6       
a   
6 ½here the products are not available like MCD,,
coca cola, IBM, Kellogg's
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6 Matching products to national conditions.
Customize products.
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6 Standardized products ,
6 Economies of scale
6 Undifferentiated product
6 Competitive price
©

6 Export entry mode
º Direct
º Indirect

6 Contractual:-
º Licensing
º Franchising
º £ther forms (tech.)
6 Investment
º JV, strategic alliance
º Independent ventures
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6 Sales profit
6 Expansion
6 Above average returns

 
 
6 Risk
6 Uncertainty of economic & political environment
6 Cultural diversity
6 Trade barriers
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6 Reducing scope of activity
6 Demand Saturation
6 Government policies adverse
6 Substitutes Emerged
6 Changing Ñeeds & Preferences
6 Poor Management
6 ½rong Strategies
6 Poor ´uality
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6 -
  
6 2    
6 
    
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6 Ñegative cash flow
6 Ñegative Profits
6 Mismanagement
6 Declining market share
6 Uncompetitive products
6 High turnover

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6 Surgical
6 Ñon surgical
 

3

6 Sale or liquidation of portion of business , or a
major division, profit center or SBU
6 Usually part of rehabilitation or Restructuring
plan
Approach to Divestment: -
A part of company is divested
A firm may sell a unit outright
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Liquidation strategies:-
6 Closing down a firm & selling its assets
6 Termination of employees
6 Loss of employer
6 Serious consequences.
 

6 Mixture of all either applied simultaneously or
sequentially
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6 Establishing strategic intent:-


º Vision, mission, business definition & objectives
6 Formulation of strategies:-
º Environment & organizational appraisal
º Swot analysis
º Corporate level strategies
º Business level strategies
º Strategic choice
º Strategic plan
6 Strategy implementation:-
º Project, procedural, resource allocation, structural, behavioral
functional & operational
6 Strategic evaluation
6 Strategic control