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Strategic Management In Action Chapter 7

Strategic Management In Action Chapter 7. Group 4. Outline. Corporate Strategy Growth Strategies Stability Strategies Renewal Strategies Evaluation and Change. Corporate Strategy . Corporate Strategy->Functional Strategy-> Competitive Strategy Factors that influence strategy

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Strategic Management In Action Chapter 7

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  1. Strategic Management In ActionChapter 7 Group 4

  2. Outline • Corporate Strategy • Growth Strategies • Stability Strategies • Renewal Strategies • Evaluation and Change

  3. Corporate Strategy • Corporate Strategy->Functional Strategy-> Competitive Strategy • Factors that influence strategy • Economy, Environment, Government, etc

  4. Corporate Strategy • What industries are you in? • Single-business organization • Coca-Cola • Multiple-business organization • Pepsi • Red Bull

  5. Corporate Strategy Directions • Forward • Growth Strategy • Keeping things constant • Stability Strategy • Reversing decline • Renewal Strategy

  6. Growth Strategy • Expands products offered through current or new business • 5 different ways to grow: • Concentration • Vertical Integration • Horizontal Integration • Diversification • International

  7. Concentration • Focuses on primary line of business. • Tries to meet goals by expanding • Growth by adding new products/locations • 3 options: • Product-market exploitation • Product-development • Market-development

  8. Concentration • Organization becomes very good at what they do • Know competitors • Know what customers want • Exploit unique resources and core competencies • Vulnerability to industry changes. • Must be flexible with organizations direction Advantages Disadvantages

  9. Vertical Integration • Growth by gaining control of inputs and outputs • Can become their own supplier • Can become their own distributor • Overall, strategies benefits outweigh costs

  10. Horizontal Integration • Growth by combining operations with competitors. • Problems: • Can create a gray area legally • Can decrease competition and hurt consumers

  11. Diversification • Growth by moving into a different industry • Combined operations result in greater performance • Look for a strategic fit • Not commonly used • 2 major types: • Related: going into a related industry • Ex. Redbull energy shots • Unrelated: going into a completely unrelated industry • Ex. If Redbull were to produce shoes

  12. International • Growth by taking advantage of global opportunities • Discuss more in chapter 8

  13. Implementation • Mergers-acquisitions • Internal development • Strategic planning

  14. Mergers-Acquisitions • Merger: combining 2 or more organizations around same size through stock exchange. • Acquisition: outright purchase of an organization. Usually one large, one small organization. Can be friendly or hostile.

  15. Internal Development • Growth by creating and developing new business activities. • Organizations use their own resources rather than combine with other organizations.

  16. Strategic Partnering • Two or more organizations establish a partnership by combining resources. • Can partner with a supplier or distributor. • 3 main types: • Joint venture: separate independent organizations. Own equal shares. • Long-term contracts: locks supplier into long-term contracts • Strategic alliances: sharing resources

  17. Stability Strategy • Why use stability strategy? • Volatile market • Previous Rapid growth, build resources • Maturity Stage • Small Companies • Implementation • “Take a breather”

  18. Renewal Strategy • Retrenchment – short run • Turnaround – more serious • Implementation • Cost Cutting • Restructuring • Divestment • Spin-Off • Liquidation • Downsizing • Bankruptcy

  19. Evaluating and Changing Strategy • Corporate Goals • Efficiency, Effectiveness and Productivity • Benchmarking • Portfolio Analysis • BCG Matrix • McKinsey – GE Stoplight Matrix • Product Market Evaluation Matrix • Change If Necessary

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