These form the basis of managements coordination sustained efforts to achieve

These form the basis of managements coordination

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These form the basis of management’s coordination & sustained efforts to achieve long-term goals. There are 14 grand strategies that have been divided into 4 broad categories . Internal Growth Concentrated Growth Market Development Product Development Innovation External Growth Related Diversification Unrelated (conglomerate) Diversification Vertical Integration Horizontal Integration Decline Turnaround Divestiture Liquidation Bankruptcy (failure is inevitable) * not really a strategy Corporate Combinations Joint Ventures Strategic Alliances Consortia 1.) Internal Growth 2.) External Growth Related Diversification Adding new, related products and services to the product line of the organisation. Also called concentric diversification. The objective of related diversification is usually to expand the market share of an organisation in an existing market, or alternatively to enter new markets. Unrelated Adding new, unrelated products or services to the product line of the 3 | P a g e Concentrated Growth Also referred to as market penetration. A strategy that seeks to increase the market share of an organisation through increased and concentrated marketing efforts . The organisation stays focused on its present market, products and services Market Development This strategy involved expanding the portfolio of markets that the organisation serves. Present products and services are therefore introduced into new geographical regions . Product Development This strategy involved improving and modifying the products and services of the organisations in order to increase sales . Innovation While most growth-orientated organisations innovate from time to time, organisations that make innovation their grand strategy use it as the fundamental way of relating to their markets. These organisations endeavour to create new product life cycles that will make similar (existing) products and services obsolete.
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(conglomerate) Diversification organisation in an effort to reach and penetrate new markets . This type of strategy is usually applicable to large conglomerates . Some of the methods through which an organisation can pursue unrelated diversification are: buying a high-performing organisation in an attractive industry. buying a cash-strapped organisation that can be turned around quickly through additional capital investment. buying an organisation whose seasonal and cyclical sales patterns would provide stability to the cash flow and profitability of the organisation. buying a largely debt-free organisation to improve the borrowing power of the acquiring organisation. Vertical Integration Forward vertical integration entails gaining ownership over distributors or retailers . Backward vertical integration involves gaining ownership or increased control of an organisation’s suppliers. (eg. manufacturer purchases the distributor) Horizontal Integration Horizontal integration takes place when an organisation seeks ownership or increased control over certain value chain activities of its competitors . This takes
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