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GM Unit 3 DB - optimum allocation of its resources The...

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Directional Strategies are the overall orientation towards growth, stability, retrenchment. They are goals which guide decision making in a firm so that it can narrow the gap between the present and projected earnings. Some of the major strategic alternatives for each of the primary growth stances are summarized in three sub-sections; growth strategy, stability strategy, and retrenchment strategy. Growth strategies broaden the company’s activities which affect the growth of the company. Stability strategies are used when a company is satisfied with the direction that the current strategy is heading and make minimal changes. Retrenchment strategies are used when the company’s performance is poor or when profits decrease and sales are lost because of a current strategy. These strategies are meant to create significant changes in the company environment. Portfolio analysis investigates industries or markets that the firm competes in through products lines & business units, analyzing elements of a firm's product mix to determine the
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Unformatted text preview: optimum allocation of its resources. The portfolio analysis is a tool that treats its goods as investments that are supposed to bring a profitable return and corporate headquarters is in complete control. Two of the most popular approaches are the Boston Consulting Group, or BBC, and the GE Business Screen. There are advantages and disadvantages to the portfolio analysis. The advantages are that the process requires top management to look at every aspect of the business. One of the main disadvantages is that many feel that it is too simple. It puts too much importance on being the leader in the market. Parenting Strategies are a coordination and transfer of resources between product lines & business units. Corporate parenting generates corporate strategy by focusing on the core competencies of the parent corporation and on the value created from the relationship between the parent and its business....
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