CORPORATE DIRECTIONAL

STRATEGIES

GROWTH STABILITYY REFRENCHMENT

CONCEN- DIVERSI- PAUSE/PRO- NO- TURN CAPTIVE

FICATION CEED WITH PROFIT COMPANY
TRATION CHANGE AROUND
CAUTION

A no-change strategy is A profit strategy is a

a decision to do nothing decision to do nothing
VERTICAL HORIZONTAL CONCEN- CONGLOME - new—a choice to new in a worsening
GROWTH GROWTH TRIC RATE continue current situation but instead to SELL- BRANK
operations and policies act as though the
for the foreseeable company’s problems OUT/DIVEST- RUPTCY/
future. are only temporary. LIQUIDATION
MENT

A pause/proceed-with-
BACKWARD VERTICAL FORWARD caution strategy is, in
INTEGRATION INTEGRATION INTEGRATION effect, a timeout—an The sell-out strategy Bankruptcy involves
opportunity to rest makes sense if giving up management
before continuing a management can still of the firm to the courts
growth or retrenchment obtain a good price for its in return for some
strategy. shareholders and the settlement of the
employees can keep their corporation’s
jobs by selling the entire
FULL LONG-TERM company to another firm.
obligations.
INTEGRATION CONTRACT

Turnaround strategy emphasizes A captive company strategy

the improvement of operational involves giving up independence
efficiency and is probably most in exchange for security.
appropriate when a corporation’s
TAPER QUASI- problems are pervasive but not
INTEGRATION INTEGRATION yet critical.

If a company’s current product
lines have real growth potential,
concentration of resources on those
product lines makes sense as a
strategy for growth.
This strategy makes no change to the This strategy reduces the company’s
company’s current activities. level of activities.
According to strategist Richard
companies begin thinking
about diversification when
their growth has plateaued and
opportunities for growth in the
original business have been
depleted.

This strategy expands the company’s

activities.
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