STRATEGY MAKING TASKS IN VARIOUS INDUSTRY SETTINGS

(A) EMERGENT PHASE: e.g. e-banking, e-education, web commerce

Strive for Industry leadership

Technology Advancement & improve product features

Form strategic alliances with by suppliers

Price cuts for price-sensitive segment

Seek early mover advantage

Entry into new customer groups, new application areas, and

new geographical areas.

Seek aggressive advertising and promotion campaigns

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(B) GROWTH PHASE: (Reliance, Tatas; Dow Chemicals)

Penetrate and acquire High Market Share
Launch new products, expand market presence
Scout for opportunities to enter into new business
Exploit resource capabilities & internal advantages
Look for potential firms for acquisitions
Aggressively pursue R & D capabilities

(C) MATURITY PHASE: Replacement Demand

Attracting new Buyer
e.g. FMCG Industry
Prune down Product lines having low profit margins
Improve Value Chain Capabilities (Better Services, Low Costs)
BPR & HR Driven Cost Reduction
Increase sales to existing customers Complimentary product
offerings
Expand Internationally Limited competition

(D) STAGNANT/ DECLINING PHASE:

Focus on those industry segments growing rapidly
Differentiation based on successful innovation
Aggressive Cost cutting Measures
Finally, if perceived as unviable business

Sell out the Firm

Close Down Operations

Diversify into other areas

Divest/ Harvest

SAMPLE FORMAT FOR DRAWING STRATEGIC ACTION PLAN:

1. VISION/ MISSION

SUPPORT/ FUNCTIONAL
STRATEGIES

2. OBJECTIVES

Marketing

3. OVERALL BUSINESS

Finance

STRATEGY

HR
Operations

Actions to Improve Performance

Immediate
Long Run
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TRADITIONAL GRAND STRATEGIES:

The grand strategies provide an indication as regards the strategy options available
for firms depending on the environmental condition and life cycle of the industry
Traditional and commonly pursued grand strategies comprise the following:

(A) GROWTH STRATEGY: Firms strive towards enhancing growth rate

accelerating increase in market share, market reach an access market
penetration AS FEASIBLE
(B) STABILITY CRITERIA: Firms work towards stabilizing and systemizing
operations to the extent feasible Stabilize operations and remain competitive

(C) INNOVATIVE PHASE:

AGGRESSIVE R & D ACTIVITIES

NEW PRODUCT DEVELOPMENT

TECHNOLOGY ADVANCEMENT
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(D) EXPANSION STRATEGY:

Product Portfolio Increase
Market Diversity
Scout For Acquisition Partners

(E) DIVERSIFY OPERATIONS:

Vertical & Horizontal Integration
Related Diversification
Unrelated/ Conglomerate Diversification
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(F) MERGERS/ ACQUISITIONS

Merge To Enhance Firm Value
Acquire Potential Firms
Acquisition Based Growth Option

(G) DIVESTITUTE/ DISINVEST

Shut Down Loss Making Units
Divest Business At Dog Stage
Disinvest/ Harvest Sell Off Idle Assets

(I) TURNAROUND STRATEGY

Internal Measures

External Measures

Focus on Core Business

Strengthen Core Areas
M&A
Diversify

(J) RESTRUCTURING STRATEGY:

ORG Restructuring HR Aspects

Streamline & Revamp Business Processes

Extensive BPR & Downsizing If Read

(K) INTERNATIONAL LEVEL/ COLLABORATIVE STRATEGY:

Expand Business Beyond Domestic Boundary

Forge Strategic/ Business Alliance

Extreme Form of Diversification/ Alliance Partnership

RESTRUCTURING/ TURNAROUND PROCESS

Create SBU Concept

Focus on Core Business Ares

Extensive BPR Efficiency

Consolidation & Stability

M & A Create Value

Hive off Unproductive Assets

Divert Funds Problem Child

New Venture

HR ASPECTS

Org. Downsize
Develop PMS
Training & Development
Productivity Boost

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RESTRUCTURING/ TURNAROUND PROCESS

FINANCIAL RESTRUCTURING

DEBT SETTLEMENT

DEBT REPLACEMENT & RESCHEDULING

CAPITAL RESTRUCTURING

IPO/ PUBLIC ISSUE

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GRAND STRATEGY: SELECTION OPTIONS

Overcome Weakness
Turnaround
Divestiture
Liquidate

Internal
(Redeploying
Resources
within the firm)

Focused Growth
Market Development
Product Development
Innovation

Vertically Integrate
Conglomorate Diversification
B
C

A
D

External
(Mergers/ Acquisition)

Horizontal Integration
Concentric/ Related
Diversification
JVS/ Alliances
Maximizing Strengths

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STRATEGY CLUSTERS
RAPID GROWTH
Concentrated Growth
Vertical Integration
Concentric Diversification

Strong
Competitive
Position

Concentrated Growth
Horizontal Integration
Divestiture
Liquidation

Weak Competitive
Position

Diversification
JVS/ Alliances

Divestiture
Liquidation
Turnaround Strategy
Aggressive Related/
Unrelated Diversification

SLOW GROWTH
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