Chapter 7

Strategy Formulation :
Corporate Strategy
 Corporate Strategy
Corporate Strategy deals with three key issues •
:facing the organization
Directional Strategy (Growth, Stability,.1 •
Retrenchment)Strategies
Protfolio strategy. How the firm compete.2 •
through products
Parenting Strategy.(Coordinates activities and.3 •
.transfer resources and cultivates capabilities
 Directional Strategy
.Growth Strategies: Expand the activates .1 •

.Stabilities Strategies: no change in activities .2 •

Retrenchment Strategies: Reduce the .3 •

.activities
 Growth Strategies
:Concentration Strategy.1 •
a. concentrate on one product, or one product line, this can be •
:divided in the following
: vertical growth - •
Backward Integration * •
Forward integration* •
:Horizontal Growth - •
Related Diversification * •
Unrelated Diversification * •
•
. •
 International entry Option
Exporting .1 •
licensing .2 •
Franchising .3 •
Joint Venture .4 •
Acquisition .5 •
Green Field Development .6 •
Production Sharing .7 •
Turnkey Operation .8 •
BOT Concept .9 •
Management Contracts .10 •
 Stability Strategies
No change strategy.1 •

Pause\Proceed with caution strategy.2 •

Profit strategy.3 •
 Retrenchment Strategy
Turnaround Strategy.1 •

Captive company strategy.2 •

sell-out Divestment Strategy.3 •

bankruptcy\ liquidation Strategy.4 •

 Portfolio Analysis

Used in firms that have multi products or •

:business .two questions should be answered
how much time and money should we spend.1 •
on our product to ensure continue to success
How much time and money should we.2 •
.spend to develop new product
 BCG Growth-Share matrix
This matrix should have two access: Growth •
:rate and market share
Question Marks.1 •
Stars.2 •
Cash Cows.3 •
Dods.4 •