Michael Porter’s Generic
Strategies:
 Cost Leadership
 Differentiation
 Focus
Organizational Level
 Corporate
 Division
 Function
8 Desired Characteristics of
Objectives:
 Quantitative
 Measurable
 Realistic
 Understandable
 Challenging
 Hierarchical
 Obtainable
 Congruent across
departments
Objectives are commonly stated in
terms such as:
 Growth in assets
 Growth in sales
 Profitability
 Market share
 Degree and nature of
diversification
 Degree and nature of
vertical integration
 Earnings per share
 Social responsibility
Established objectives offer many
benefits:
 Provide direction
 Allow synergy
 Assist in evaluation
 Establish priorities
 Reduce uncertainty
 Minimize conflicts
 Stimulate exertion
 Aid in allocation resources
 Aid in design of jobs
 Provide basis for
consistent decision making
2 Types of Objectives:
 Financial Objective
(growth in revenues,
growth in earnings, higher
dividends, larger profit
margins, greater return on
investment, higher
earnings per share, rising
stock price, improved cash
flow)
 Strategic Objective (larger
market share, quicker on-
time delivery than rivals,
shorter design-to-market
times than rivals, lower
costs than rivals, higher
product quality than rivals,
wider geographic coverage
than rivals, achieving
technological leadership,
consistently getting new or
improved products to
market ahead of rivals)
Avoid Not Managing by
Objectives:
 Managing by extrapolation
 Managing by crisis
 Managing by subjectives
 Managing by hope
Alternatives Strategies (Types):
 Forward Integration
 Backward Integration
 Horizontal Integration
 Market Penetration
 Market Development
 Product Development
 Related Diversification
 Unrelated Diversification
 Retrenchment
 Divestiture
 Liquidation
Integration Strategies:
 Forward Integration
 Backward Integration
 Horizontal Integration
Intensive Strategies:
 Market Penetration
 Market Development
 Product Development
Diversification Strategies:
 Related Diversification
 Unrelated Diversification
Defensive Strategies:
 Retrenchment
 Divestiture
 Liquidation
Means of Achieving Strategies:
 Cooperation and
Competitors
 Joint Venture and
Partnering
 Merger/Acquisition
 Private-Equity
Acquisitions
9 Reasons Why Many Mergers and
Acquisitions Fail:
 Integration difficulties
 Inadequate evaluation of
target
 Large or extraordinary
debt
 Inability to achieve
synergy
 Too much diversification
 Managers overly focused
on acquisitions
 Too large an acquisition
 Difficult to integrate
different organizational
cultures
 Reduced employees
morale due to layoffs and
relocations
11 Potential Benefits of Merging
with or Acquiring Another Firm:
 To provide improved
capacity utilization
 To make better use of the
existing sales force
 To reduce managerial staff
 To gain economies of
scale
 To smooth out seasonal
trends in sales
 To gain access to new
suppliers, distributors,
customers, products, and
creditors
 To gain new technology
 To gain market share
 To enter global markets
 To gain pricing power
 To reduce tax obligations
Tactics to Facilitate Strategies:
 First Mover Advantages
 Outsourcing and
Reshoring
5 Benefits of a Firm Being the Nonprofit, Governmental, and
First Mover: Small Firms:
 Secure access and  Educational
commitments to rare institutions
resources  Medical organizations
 Gain new knowledge of  Governmental
critical success factors and agencies and
issues departments
 Gain market share and  Small firms
position in the best
locations
 Establish and secure long-
term relationship with
customers, suppliers,
distributors, and investors
 Gain customer loyalty and
commitments

13 Potential Benefits of
Outsourcing:
 Cost savings
 Focus on core business
 Cost restructuring
 Improve quality
 Knowledge
 Contract
 Operational expertise
 Access to talent
 Catalyst for change
 Enhance capacity for
innovation
 Reduce time to market
 Risk management
 Tax benefit

7 Benefits of Reshoring Back to

US:
 Stable wages
 Reduced gas and
electricity costs
 Excellent security to
protect designs from
overseas copycats
 Enable closer tabs on
quality control and supply
chains
 Excellent economy with
consumers purchasing
more
 Less shipment costs with
consumers nearby
 Excellent human rights,
education, legal, and
political systems that
promote freedom and
opportunity for citizens