strategic management & business policy 10 th edition
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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. - PowerPoint PPT PresentationTRANSCRIPT
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 7 Strategy Formulation: Corporate Strategy
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Corporate Strategy
3 Key Issues –
–Firm’s directional strategy
–Firm’s portfolio strategy
–Firm’s parenting strategy
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Corporate Directional Strategies
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Corporate Strategy
Directional Strategy –
–Orientation toward growth•Expansion, contraction, status quo•Concentration or diversification•Internal development or acquisitions, mergers, or alliances
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Corporate Strategy
Directional Strategy –
–3 Grand Strategies
•Growth strategies
•Stability strategies
•Retrenchment strategies
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Corporate Strategy
Growth Strategies --
–External mechanisms
•Mergers
•Acquisitions
•Strategic alliances
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Corporate Strategy
Growth Strategies --
–2 Basic forms
•Concentration
•Diversification
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Corporate Strategy
Basic Concentration Strategies --
–Vertical growth
–Horizontal growth
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Corporate Strategy
Vertical Growth --
–Vertical integration•Full integration•Taper integration•Quasi-integration•Long-term contract
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Corporate Strategy
Vertical Growth --
–Backward integration
–Forward integration
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Corporate Strategy
Concentration --
–Horizontal Growth•Horizontal integration
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Corporate Strategy
Basic Diversification Strategies --
–Concentric Diversification
–Conglomerate Diversification
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Corporate Strategy
Concentric Diversification --
–Growth into related industry–Search for synergies
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Corporate Strategy
Conglomerate diversification --
–Growth into unrelated industry–Concern with financial considerations
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Corporate Strategy
International Entry Options --
–Exporting–Licensing–Franchising–Joint Ventures–Acquisitions–Green-Field Development
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Corporate Strategy
International Entry Options --
–Production Sharing–Turnkey Operation–BOT Concept (Build, Operate, Transfer)–Management Contracts
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Corporate Strategy
Stability Strategies --
–Pause/proceed with caution
–No change
–Profit strategies
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Corporate Strategy
Retrenchment Strategies --
–Turnaround–Captive Company Strategy–Selling out–Bankruptcy–Liquidation
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Corporate Strategy
Portfolio Analysis --
–Resource commitment on best products to ensure continued success
–Resource commitment on new costly products high risk
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BCG Matrix (Portfolio Analysis)
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GE Business Screen (Portfolio Analysis)
AWinners Winners
B
C
Question Marks
D
F
Average Businesses
EWinners
Losers
GLosers H
LosersProfit
Producers
Strong Average Weak
Low
Medium
High
Business Strength/Competitive Position
Indu
stry
Att
ract
ive
ness
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Corporate Strategy
Corporate Parenting Strategy --
–Strategic factors–performance improvement–Analyze fit