Identify Strategic

Strategic Management Management Execution

Process

Stability Strategy
This strategy essentially seeks to curb the decline in sales and profits of the company and is valid when
the company is in the phase of instability. This strategy aims to stimulate the company to be in a
position to resume growth.

Leadership and Organization Restructuring.

Reduction and / or reassignment of assets.
Costs reduction.
Repositioning of the Company.

Clearance Strategy
This strategy consists of abandoning or liquidating the business because it is not only no longer
profitable, but is even generating losses.
The settlement strategy can be total or partial. It will be partial when what the company does is to leave
a certain business, but the company continues to function because it is dedicated to other activities
that are profitable (diversified company). The liquidation will be total when the strategy supposes the
definitive closure of the company.
The liquidation of the company or business must be done when it is still possible to obtain an economic
value for it. To the extent that the situation deteriorates, the sale price of the company will be reduced.
 Identify Strategic
Strategic Management Management Execution
Process

Divestment Strategy
When the company is located at the end of the maturity phase or even at the beginning of the phase of
decline or crisis, the life cycle model proposes to follow a divestment strategy, which consists of
preserving the activity (not abandoning it) but diverting resources to other activities or businesses. The
situation is already irreversible and the activity, sooner or later, will come to an end, so we must use
the resources to exploit other activities with higher expectations. This strategy is necessary when
neither sanitation nor harvesting has given the expected results.
With this strategy, you can even sell or liquidate parts of the company or some of its activities that are
generating losses.
There are a number of factors that may hinder or facilitate the implementation of a divestment
strategy:
Structural factors such as the existence of specific assets, which prevents or hinders the sale of the
same to be able to divest.
The interrelationships existing between the different parts of the company make it difficult to sell or
liquidate a particular part or activity because its liquidation would harm other parts or activities of
the company, because of the dependency or complementarity that exists between them.
Psychological factors derived from the opposition shown by the people of the organization, in
particular, by certain managers who see in the divestment a loss of power or even a discredit for
them.
 Identify Strategic
Strategic Management Management Execution
Process

Contraction strategy
The Contraction strategy refers to a review and evaluation of the segments established
by the organization, in order to determine those that are profitable and unnecessary.
As a result of this evaluation, the segments are grouped in such a way that the number
of them is reduced, which does not mean that they disappear, but rather that they are
grouped.
The contraction takes place when the company has diversified a lot, and the costs of
production increase or are dispersed; its purpose is to ensure that all segments of the
market are profitable and fully satisfied. The advantage of implementing this strategy is
that production costs are reduced by not having to manufacture a great diversity of
products for each segment.
 Identify Strategic
Strategic Management Management Execution
Process

Growth Strategies
They consist in increasing the efficiency and control of all operations by carrying out
activities and processes normally carried out by other organizations outside the company.
Integration can be given in three senses:
Forward. Its purpose is to achieve a high degree of control over the distribution systems,
for which the company that produces is also dedicated to distribute.
Backward. It is done to obtain greater control over the supply systems, ie the suppliers of
the company, to avoid problems in the acquisition of the raw material, which is achieved
when the organization produces its own inputs.
Horizontal. It refers to better control over the elements of competition, through alliances
or strategic mergers.
 Identify Strategic
Strategic Management Management Execution
Process

Diversification Strategies

These make sense when the company does not find many opportunities for the future
development of its products, or when the opportunities in other branches are superior
to the present ones. There are three types of diversification:

Concentric. The purpose of these is to add a new product or service that is compatible
with the product line that runs the company, taking advantage of the type of
technology, management style and existing resources.

Horizontal. Its basic function is to seek the satisfaction of the current customers of the
company, through a new product line, without there being a technological relationship
with the current products.

Conglomerate. It applies when looking for a total diversification of the company.

 Identify Strategic
Strategic Management Management Execution
Process

The Matrix of growth - participation, known as Matrix of

Boston Consulting Group or Matrix BCG, is a graphical method
of analysis of portfolio of businesses developed by the Boston
Consulting Group in the decade of 1970 and published1 by
the president of the mentioned consultant, Bruce D.
Henderson, in 1973.
It is a tool of strategic analysis, used in the Corporate Strategic
Planning. It is a simple matrix with four quadrants, each one
represented by a figure.
The quadrants are:

STAR: Great growth and great market share. It must be strengthened until the market becomes mature
and becomes Cow.

QUESTION MARK: High growth and low market share. Revaluate the strategy to turn it into Star or Dog.

COW: Low growth and high market share. It is a business area that will serve to generate cash needed
to create new Stars.

DOG. There is no growth and market share is low. Business areas with low profitability or even
negative. It is recommended to get rid of it when possible. Usually they are businesses or
products that are in their last stage of life.
 Identify Strategic
Strategic Management Management Execution
Process

The Balanced Scorecard is a model that becomes a very useful tool for strategic management.
It is based on the definition of strategic objectives, indicators and strategic initiatives, establishing cause-effect
relationships through the strategic map in four basic perspectives:
Financial, Customer, Internal Processes and Learning-Growth, is translated the strategic objectives directly related
and to be measured through indicators, aligned initiatives.
The successful implementation of the BSC is to involve people from different levels and areas of the organization.

Financial

Internal
Customer Company Business
Process

Learning
and
Growth