CORPORATE STRATEGY AND COMPETITIVE ADVANTAGES

ISSUES TO BE COVERED
GRAND STRATEGIES STABILITY GROWTH ANSOFFS MATRIX INTEGRATION HORIZONTAL VERTICAL DIVERSIFICATION CONCENTRIC(RELATED) HORIZONTAL CONGLOMERATE(UNRELATED) INTERNATIONAL EXPANSION MERGERS AND ACQUISITIONS STRATEGIC ALLIANCES RETRENCHMENT ( TURNAROUND) C0MBINATION

Concept Strategy
The determination of basic long term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out goals It involves matching the firms capabilities with the external enviroment.

Business Strategy Planning (Eight Steps):

1. Define a business mission 2. Conduct an external environment analysis (opportunities/threats) (SWOT) 3. Conduct an internal environment analysis (strengths/weaknesses)(SWOT/continue d) 4. Formulate goals 5. Formulate strategy 6. Formulate programs 7. Implement 8. Get feedback and control

Formulation of strategies
Environmental Analysis CUSTOMERS COMPETETIORS SUPPLIERS REGULATORS INFRASTRUCTURE SOCIO POLITICAL ENV

Formulation of Strategies
Internal analysis TECHNICAL KNOW-HOW CAPABILITY LOGISTICS FINANCES MARKETING DISTRIBUTION

Opp & Threats Strengths & Weaknesses Finally its the firm strategies.

Grand Strategy

Grand Growth

Stability

Contraction

STABILITY STRATEGIES
TO CONTINUE WITH THE EXISTING BUSINESS STRATEGIC PLAN AS SHOWN EARLER.IT IS APPROPRIATE IF ENVIRONMENTAL TURMOIL IS AT MINIMAL AND THE FIRM DOES NOT SEE ANY THREAT. FIRM IS HAPPY WITH SMALL INCREMENTAL GROWTH AND NOT SEEKING TO INVEST HEAVILY IN EXPANSION

EITHER OF INDUSTRY OR ECONOMY IS IN TURMOIL

FIRM HAS JUST GONE FOR HEAVY EXPANSION AND NEED TO CONSOLIDATE BEFORE NEXT ROUND OF EXPANSION. INDUSTRY IS IN MATURE STAGE WITH FEW OR NO GROWTH PROSPECT AND THE FIRM IS IN A COMFORTABLE POSITION.

CORPORATE NEW-BUSINESS PLAN

Sales
Desired sales Diversification growth integrative growth Intensive growth

Strategic planning gap Projected sales

Time (years) 0 5 10 Major Classes of Growth Opportunities -----------------------------------------------------------------------------------------------------------------------Intensive Integrative Diversification Growth Growth Growth -----------------------------------------------------------------------------------------------------------------------* Market Penetration * Market development * Product development * Backward integration * Forward integration * Concentric diversification * Horizontal diversification

* Horizontal integration

* Conglomerate diversification

Growth Strategies
There are three major growth strategies: 1. 2. 3. Intensive growth (market penetration, market development, product development) Diversification growth (concentric, horizontal, conglomerate) Integrative growth (backward, forward, horizontal)

Three Intensive Growth Strategies

Current Products New Products

Current Markets

1. Market Penetration Strategy

3. Product development Strategy

New Markets

2. Market development strategy

(Diversification strategy)