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STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION

CHAPTER 7 Strategy Formulation: Corporate Strategy. STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION. THOMAS L. WHEELEN J. DAVID HUNGER. Corporate Strategy. 3 Key Issues – Firm’s directional strategy Firm’s portfolio strategy Firm’s parenting strategy.

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STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION

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  1. CHAPTER 7 Strategy Formulation: Corporate Strategy STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER

  2. Corporate Strategy • 3 Key Issues – • Firm’s directional strategy • Firm’s portfolio strategy • Firm’s parenting strategy

  3. Corporate Directional Strategies

  4. Corporate Strategy • Directional Strategy – • Orientation toward growth • Expansion, contraction, status quo • Concentration or diversification • Internal development or acquisitions, mergers, or alliances

  5. Corporate Strategy • Directional Strategy – • 3 Grand Strategies • Growth strategies • Stability strategies • Retrenchment strategies

  6. Corporate Strategy • Growth Strategies -- • External mechanisms • Mergers • Acquisitions • Strategic alliances

  7. Corporate Strategy • Growth Strategies -- • 2 Basic forms • Concentration • Diversification

  8. Corporate Strategy • Basic Concentration Strategies -- • Vertical growth • Horizontal growth

  9. Corporate Strategy • Vertical Growth -- • Vertical integration • Full integration • Taper integration • Quasi-integration • Long-term contract

  10. Corporate Strategy • Vertical Growth -- • Backward integration • Forward integration

  11. Corporate Strategy • Concentration -- • Horizontal Growth • Horizontal integration

  12. Corporate Strategy • Basic Diversification Strategies -- • Concentric Diversification • Conglomerate Diversification

  13. Corporate Strategy • Concentric Diversification -- • Growth into related industry • Search for synergies

  14. Corporate Strategy • Conglomerate diversification -- • Growth into unrelated industry • Concern with financial considerations

  15. Corporate Strategy • International Entry Options -- • Exporting • Licensing • Franchising • Joint Ventures • Acquisitions • Green-Field Development

  16. Corporate Strategy • International Entry Options -- • Production Sharing • Turnkey Operation • BOT Concept (Build, Operate, Transfer) • Management Contracts

  17. Corporate Strategy • Stability Strategies -- • Pause/proceed with caution • No change • Profit strategies

  18. Corporate Strategy • Retrenchment Strategies -- • Turnaround • Captive Company Strategy • Selling out • Bankruptcy • Liquidation

  19. Corporate Strategy • Portfolio Analysis -- • Resource commitment on best products to ensure continued success • Resource commitment on new costly products high risk

  20. BCG Matrix (Portfolio Analysis)

  21. GE Business Screen (Portfolio Analysis) C Winners Winners A Question B High Marks D Winners E Average Businesses F Industry Attractiveness Medium Losers H Losers G Low Profit Producers Losers Strong Average Weak Business Strength/Competitive Position

  22. Corporate Strategy • Corporate Parenting Strategy -- • Strategic factors • performance improvement • Analyze fit

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