“Fit between a parent and its businesses is a two-edged sword: a good fit can create value; a bad one can destroy it.” Andrew Campbell, Michael Gould, and Marcus Alexander “Quote”
Corporate Level Strategy Formulation Responsibilities • Direction Setting • Establishment and communication of organizational mission, vision, enterprise strategy and long-term goal • Development of Corporate-level Strategy • Broad approach to corporate-level strategy— growth, stability, retrenchment or combination. • Selection of resources and capabilities in which to develop corporate-level distinctive competencies
• Selection of Businesses and Portfolio Management • Buy and sell businesses • Allocation of resources to business units for capital equipment, R&D, etc. • Selection of Tactics for Diversification and Growth • Choice among methods of diversification —internal venturing, acquisitions, joint ventures Corporate Level Strategy Formulation Responsibilities
CS CONCERNED WITH CHOICE OF – Businesses, – Products – And markets
Advantages of CS – Bridge the gap – Exploit the opportunities – Develop core competencies
GRAND STRATEGIC ALTERNATIVES • GROWTH/ EXPANSION • STABILITY OR CONSOLODATION • RETRENCHMENT • COMBINATION
GROWTH / EXPANSION I ntensification / Concentration • Market Penetration • Market Development • Product Development • Innovation
GROWTH / EXPANSION DIVERSIFICATION • HORIZONTAL • CONCENTRIC • CONGLOMERATE • VERTICAL (INTEGRATION) • FORWARD • BACKWARD
STABILITY / CONSOLODATION • INCREMENTAL GROWTH • PROFIT • SUSTAINABLE GROWTH • PAUSE STRATERGY
RETRENCHMENT • DIVESTMENT • TURNAROUND • LIQUIDATION • BANKRUPTCY
COMBINATION • JOINT VENTURES • STRATEGIC ALLIANCES • CONSORTIA
Growth / Expansion When to Adopt • Growth be manageable • To take into account environmental demands • Natural choice when opportunities exists
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- Spring '11