CHAPTER 5- STRATEGIES IN ACTION MADE BY: JANDA, YSA NICE A. SUBJECT: BMC 201- STRATEGIC MANAGEMENT CHAPTER OUTLINE Long-Term Objectives Types of Strategies Integration Strategies Intensive Strategies Diversification Strategies Defensive Strategies Michael Porter’s Generic Strategies • Means for Achieving Strategies • Merger/ Acquisition • • • • • • • • Strategic Management in Nonprofit and Government Organizations • Strategic Management in Small Firms LONG-TERM OBJECTIVES • Long-term objectives represent the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long-term objectives. NATURE OF LONG-TERM OBJECTIVES 1. 2. 3. 4. 5. 6. 7. 8. Quantitative Measurable Realistic Understandable Challenging Hierarchical Obtainable Congruent TYPE OF STRATEGIES: INTEGRATION STRATEGIES • Forward Integration - gaining ownership or increased control over distributors or retailers • Backward Integration - seeking ownership or increased control of a firm’s suppliers • Horizontal Integration - seeking ownership of or increased control over a firm’s competitor. INTENSIVE STRATEGIES • Market-Penetration Strategy - seeks to increase market share for present products or services in present markets through greater marketing efforts. • Market Development - introducing present products or services into new geographic areas • Product Development - seeks increased sales by improving or modifying present products or services DIVERSIFICATION STRATEGIES • Concentric Diversification - adding new, but related product or service. • Horizontal Diversification - adding new, unrelated products or service for present customers. • Conglomerate Diversification - adding new, unrelated products and services. DEFENSIVE STRATEGIES • Retrenchment – occurs when an organization regroups through cost and asset reduction to reverse declining sales and profit. • Divestiture - re-examine the asset of your business and company. • Liquidation - is the selling of all of your company’s assets. MICHAEL PORTER’S GENERIC STRATEGIES • Cost Leadership Strategies - emphasizes producing standardized products at a very low per-unit cost for consumers who are price-sensitive. • Differentiation Strategies - aimed at producing products and services considered unique industrywide and directed at the consumers who are relatively price-sensitive. • Focus Strategies - producing products and services that fulfill the needs of small groups of consumers MEANS FOR ACHIEVING STRATEGIES Joint Venture - occurs IF 2 or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity. Planning - is the outsourcing, information sharing, joint marketing and joint research and development. MERGER & ACQUISITION • Merger - occurs if 2 organization of about equal size unite to form one enterprise. • Acquisition - occurs if large organization purchase a smaller firm or vice versa. STRATEGIC MANAGEMENT IN NONPROFIT AND GOVERNMENT ORGANIZATIONS • Educational Institutions • Medical Organizations • Governmental agencies and Departments. STRATEGIC MANAGEMENT IN SMALL FIRMS • Strategic management is both vital for large firms and small companies’ success. THE END!!!