ADOPTING DIFFERENT STRATEGIES 02.02.11

ADOPTING DIFFERENT STRATEGIES 02.02.11 - REASONS FOR...

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Click to edit Master subtitle style 3/4/11 REASONS FOR ADOPTING DIFFERENT A. STABILITY STRATEGY 1. LESS RISKY, FEWER CHANGES, MORE COMFORT 2. ENVIRONMENT RELATIVELY MORE STABLE 3. EXPANSION PERCEIVED AS THREATENING 4. CONSOLIDATION AFTER RAPID EXPANSION B. EXPANSION STRATEGY 1. ENVIRONMENTAL IMPERATIVE FOR INCREASED PACE 2. PSYCHOLOGICALLY SATISFYING 3. MORE CONTROL OVER MARKET VIS – A – VIS COMPETITORS 4. C. RETRENCHMENT STRATEGY 1. 2. THREATENING ENVIRONMENT 3. REALLOCATION OF RESOURCES TO PROFITABLE BUSINESS D. COMBINATION STRATEGY
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3/4/11 CORPORATE – LEVEL STRATEGIES 1. GRAND STRATEGIES 2. STABILITY STRATEGIES 3. EXPANSION STRATEGIES 4. RETRENCHMENT STRATEGIES 5. COMBINATION STRATEGIES 6. RESTRUCTURING STRATEGIES
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3/4/11 According to Glueck, “Strategic alternatives revolve around the question of whether to continue, or change the businesses the enterprise is currently in, or improve the efficiency & effectiveness with which the firm achieves its corporate objectives in its
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3/4/11 GRAND STRATEGIES 1. STABILITY STRATEGIES 2. EXPANSION STRATEGIES 3. RETRENCHMENT STRATEGIES 4. COMBINATION STRATEGIES
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3/4/11 TYPES OF STABILITY 1. NO – CHANGE STRATEGY 2. PROFIT STRATEGY 3. PAUSE / PROCEED WITH CAUTION STRATEGY
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3/4/11 2. EXPANSION STRATEGIES a) Expansion through concentration b) Expansion through integration c) Expansion through diversification d) Expansion through cooperation e) Expansion through internationalization
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3/4/11 CONDITIONS CONDUCIVE FOR MARKET PENETRATION 1. Current market not flooded with a particular product 2. The rate of use of product can be increased significantly 3. Market share of competitors going down, while total industry sales are going up 4. Relationship between sales and expenditure very high in recent years 5. High profits due to increase in economics of scale
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3/4/11 CONDUCIVE CONDITIONS FOR MARKET DEVELOPMENT 1. Availability of new sources of reliable, inexpensive & good quality distribution sources 2. Profitable operations 3. Current market flooded with company’s product 4. Sufficient economic & human resources to manage expanded operations 5. Sufficient production capacity 6. Rapidly growing industry
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3/4/11 CONDUCIVE CONDITIONS FOR PRODUCT DEVELOPMENT 1. Existing product at maturity stage 2. Competitors offering better quality product at comparable prices 3. Industry in rapid growth stage 4. Strong in-house R & D capability
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3/4/11 ADVANTAGES OF CONCENTRATION STRATEGY 1. LESS THREATENING 2. ENABLES SPECIALIZATION IN SAME BUSINESS 3. DEVELOPMENT OF COMPETITIVE ADVANTAGE 4. FEWER PROBLEMS 5. HIGH DEGREE OF PREDICTABILITY 6. PAST EXPERIENCE REPLICABLE
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3/4/11 DISADVANTAGES OF CONCENTRATION STRATEGY 1. HIGHER RISK DUE TO HEAVY DEPENDENCE 2. DIFFICULT TO WITHDRAW IN ADVERSE
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ADOPTING DIFFERENT STRATEGIES 02.02.11 - REASONS FOR...

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