Strategy_Formulation_Corporate_Strategy

Strategy_Formulation_Corporate_Strategy - Strategy...

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Strategy Formulation Corporate strategy
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Corporate Strategy is primarily about the choice of direction for the firm as a whole (small one-product company and a large multi business company) is also about managing various product lines and business units for maximum value (large multi business company)
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Corporate Strategy 3 Key Issues – The firm’s overall orientation toward growth, stability or retrenchment (directional strategy) The industries or markets in which the firm competes through its products and BU (portfolio strategy) The manner in which management coordinates activities, transfer resources, and cultivates capabilities among product lines and BUs (parenting strategy)
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Corporate Directional Strategy Orientation toward growth Expansion, contraction, status quo Concentration or diversification Internal development or acquisitions, mergers, or alliances
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Corporate Directional Strategy 3 Grand Strategies
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Corporate Directional Strategy 1. Growth Strategies -- A corporation can grow internally by expanding its operation both globally and domestically, or it can grow externally
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Corporate Directional Strategy 1. Growth Strategies -- External mechanisms: Mergers (Allied Corporation+ Signal Companies= Allied Signal) Acquisitions ( Procter & Gamble acquisition of Richardson-Vicks knowing for Oil of Olay and Vidal Sassoon brands) Strategic alliances
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Corporate Directional Strategy 1. Growth Strategies -- Main advantages: May mask flaws in a company Provide a big cushion for turnaround in case a strategic error is made Give more bargaining power Offer more opportunities for advancement, promotion, and interesting jobs 2 Basic forms: Concentration Diversification
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Basic Concentration Strategies Vertical Growth -- Vertical integration Full integration (100% suppliers +controls distributors) Taper integration (<50% supplies; use own and external distribution channels) Quasi-integration (buy/sell from outside suppliers/distributors that under its partial control) Long-term contract Backward integration
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This note was uploaded on 01/20/2012 for the course SM 402 taught by Professor Staff during the Fall '11 term at Ball State.

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Strategy_Formulation_Corporate_Strategy - Strategy...

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