Group 4
 Corporate
Strategy
◦Growth Strategies
◦Stability Strategies
◦Renewal Strategies
◦Evaluation and Change


Corporate Strategy->Functional Strategy->
Competitive Strategy
Factors that influence strategy
◦ Economy, Environment, Government, etc

What industries are you in?
◦ Single-business organization
 Coca-Cola
◦ Multiple-business organization
 Pepsi

Red Bull

Forward
◦ Growth Strategy

Keeping things constant
◦ Stability Strategy

Reversing decline
◦ Renewal Strategy


Expands products offered through current
or new business
5 different ways to grow:





Concentration
Vertical Integration
Horizontal Integration
Diversification
International




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
Advantages




Organization becomes
very good at what they
do
Know competitors
Know what customers
want
Exploit unique
resources and core
competencies
Disadvantages


Vulnerability to
industry changes.
Must be flexible with
organizations direction




Growth by gaining control of inputs and
outputs
Can become their own supplier
Can become their own distributor
Overall, strategies benefits outweigh costs


Growth by combining operations with
competitors.
Problems:
◦ Can create a gray area legally
◦ Can decrease competition and hurt consumers





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


Growth by taking advantage of global
opportunities
Discuss more in chapter 8



Mergers-acquisitions
Internal development
Strategic planning


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.


Growth by creating and developing new
business activities.
Organizations use their own resources
rather than combine with other
organizations.



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 longterm contracts
◦ Strategic alliances: sharing resources

Why use stability strategy?
Volatile market
Previous Rapid growth, build resources
Maturity Stage
Small Companies
◦
◦
◦
◦

Implementation
◦
“Take a breather”



Retrenchment – short run
Turnaround – more serious
Implementation
◦ Cost Cutting
◦ Restructuring





Divestment
Spin-Off
Liquidation
Downsizing
Bankruptcy




Corporate Goals
Efficiency, Effectiveness and Productivity
Benchmarking
Portfolio Analysis
◦ BCG Matrix
◦ McKinsey – GE Stoplight Matrix
◦ Product Market Evaluation Matrix

Change If Necessary