Course Code: MGT502

Course Title: STRATEGIC MANAGEMENT

Lecture 07: Strategies in Action

Department : Business Administration

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Contents
S. # Topics Page #
1 Long-term Objectives 3
2 Types of Strategies 4
3 Integration Strategies 5
4 Intensive Strategies 6-7
5 Diversification Strategies 8
6 Defensive Strategies 9
7 Michael Porter’s Generic Strategies 10
8 Means for achieving Strategies 11- 12
9 Strategic Management in non-profit and Government Organization 13
10 Strategic Management in small firms 14 - 16
11 References l Sources 17

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Strategy In Action
• LONG TERM OBJECTIVES:
-Results expected from pursuing certain strategies.
-Strategies represent actions to accomplish long-term objectives.

Long term objectives should be, Quantifiable, Measurable,

Realistic, Understandable, Challenging, Hierarchical, Obtainable,
Congruent, Time-line

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Types of Strategy

INTENSIVE STRATEGIES
MARKET PENATRATION

MARKET DEVELOPMENT

PRODUCT DEVELOPMENT

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•Forward integration: Gaining ownership or increased control

over distributors or retailers
• Backward integration: Seeking ownership or increased
control of a firm’s suppliers
• Horizontal integration: Seeking ownership or increased
control over competitors

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Intensive Strategy
Intensive Strategies
Intensive Efforts Improve competitive position with existing
products.
•Market Penetration:
Seeking increased market share for present products or
services in present markets through greater marketing efforts.

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Intensive Strategy

Market Development:
Introducing present products or services into new geographic area.

Product Development: Seeking increased sales by improving present

products or services or developing new ones( David,2007,p.177 - 178)1

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Reference No: Diversification Strategies:

• Concentric diversification: Adding new, but related, products

or services.
• Conglomerate diversification: Adding new, unrelated
products or services
• Horizontal diversification: Adding new, unrelated products or
services for present customers.

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Defensive Strategies

• Joint venture:Two or more sponsoring firms forming a

separate organization for cooperative purposes.
• Retranchement: Regrouping through cost and asset reduction
to reverse declining sales and profit
• Divestiture:Selling a division or part of an organization.
• Liquidation:Selling all of a company’s assets, in parts, for
their tangible worth

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Michael Porter’s Generic Strategies

-Cost Leadership Strategies: In conjunction with

differentiation, Economies or diseconomies of scale, Capacity
utilization achieved, Linkages w/ suppliers & distributors.

-Differentiation Strategies: Greater product flexibility, Greater

compatibility, Lower costs, Improved service, Greater
convenience, More features.
-Focus Strategies: Industry segment of sufficient size, Good
growth potential., Not crucial to success of major competitors.
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Means for Achieving strategies

1. Joint Venture/Partnering:
Two or more companies form a temporary partnership or
consortium for purpose of capitalizing on some opportunity.
2. Cooperative Arrangements:
-R&D partnerships
- Cross-distribution agreements
-Cross-licensing agreements
-Cross-manufacturing agreements
-Joint-bidding consortia
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Means for Achieving strategies

3. Mergers & Acquisitions:

• Provide improved capacity utilization
• Better use of existing sales force
• Reduce managerial staff
• Gain economies of scale
• Smooth out seasonal trends in sales
• Gain new technology
• Access to new suppliers, distributors, customers,
• products, creditors(David, 2007,p. 194-198) 2
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STRATEGIC MANAGEMENT ON NON
PROFIT ORGANIZATION:
Strategic management in nonprofit organizations is the process of selecting an
organization's goals, determining the strategic programs necessary to achieve
specific objectives in route to the goals, and establishing the methods necessary to
assure that the policies and strategic programs are implemented. Strategic
management is the formalized long-range planning process used to define and
achieve organizational goals. Because strategic-planning techniques have
developed out of the experiences and situations of large business organizations, they
have not been easy to apply in nonprofit organizations. At the same time, the
diversity among nonprofits makes it difficult to determine which formal planning
experiences and problems of one type of nonprofit might prove relevant to others.
The analyzed method of strategic management, that the article deals with, is a
universal strategic method(Research gate)3

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STRATEGIC MANAGEMENT IN SMALL
FIRM:

• Strategic management enables small businesses to know their

competencies. Understanding a company’s competencies
enables it to focus on the same and reap as much profit as
possible. It will help also help them a lot when coming up with
marketing strategies as they can use these strong positive facts
as their selling points.

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STRATEGIC MANAGEMENT IN SMALL
FIRM:

For small businesses, strategic planning helps to reduce frustrations. The

businessman understands that strategic management is a process and so they do not
have a myopic view about the business’s future. Although things may not to be
alright at the beginning they can bank on the step by step approach to get him or her
to the desired destination.

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STRATEGIC MANAGEMENT IN SMALL
FIRM:

In business, consistency is very important. it gives your customers as well as other

businesses that are contemplating getting into business with you a sense of security.
No one wants to get a product today that will not be accessible the next month.
Investors do not want to invest in a business that may or may not succeed. The best
way to ensure consistency and thereby build confidence in your small business is to
apply strategic management. Strategic management enables you to plan your every
move so that you do not come up with activities or initiatives at the spur of the
moment. It is being proactive and not merely reactive.

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References:

Fred R. David(2007), Strategic Management: concept and cases, eleventh (Eds),(pp.177-189) New
Jersey, Prentice Hall.
Fred R. David(2007), Strategic Management: concept and cases, eleventh (Eds),(pp.194-198) New
Jersey, Prentice Hall.
https://www.researchgate.net/publication/297779618_Strategic_management_for_the_nonprofit_organizatio
ns

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