Types Corporate Growth strategies Stability strategies Retrenchment strategies

Directional Are strategies wherein the company Are strategies wherein the Are strategies wherein the
Strategy expand its activities company make no change in its company reduce the level of its
current activities activities.
Main Type Concentration Pause/proceed-with-caution Turnaround strategy Emphasizes
If a company’s current product lines strategy the improvement of operational
have real growth potential, Is in effect, a timeout—an efficiency and is probably most
concentration of resources on those opportunity to rest before appropriate when a
product lines makes sense as a continuing a growth or corporation’s problems are
strategy for growth. retrenchment strategy. It is a pervasive but not yet critical.
Diversification very deliberate attempt to make Captive company strategy
According to strategist Richard only incremental improvements Involves giving up independence
Rumelt, companies begin thinking until a particular environmental in exchange for security. A
about diversification when their situation changes. company with a weak
growth has plateaued and No-change strategy competitive position may not be
opportunities for growth in the original Is a decision to do nothing able to engage in a full-blown
business have been depleted. new—a choice to continue turnaround strategy.
current operations and policies Sell-Out/Divestment Strategy
Sub type for the foreseeable future. If a corporation with a weak
Rarely articulated as a definite competitive position in an
Vertical Growth strategy, a no change strategy’s industry is unable either to pull
By taking over a function previously success depends on a lack of itself up by its bootstraps, it may
provided by a supplier or by a significant change in a have no choice but to sell out.
distributor. corporation’s situation. Bankruptcy/Liquidation
Backward integration Profit strategy Strategy
Assuming a function previously Is an attempt to artificially Bankruptcy involves giving up
provided by a supplier. Example of this support profits when a management of the firm to the
is when a company provide their own company’s sales are declining by courts in return for some
supply of their ingredient. reducing investment and short- settlement of the corporation’s
Forward integration term discretionary expenditures. obligations.
 Assuming a function previously
provided by a distributor. Example of
this is when company distribute its
own product.
Horizontal Growth
By expanding its operations into other
geographic locations and/or by
increasing the range of products and
services offered to current markets.
Example of this is when company
opened a new branch into another
location or through franchise.
Concentric (Related) Diversification
Growth into a related industry may be
a very appropriate corporate strategy
when a firm has a strong competitive
position but industry attractiveness is
low. Example of this is when company
make a new product that is related to
your industry.
Conglomerate (Unrelated)
Diversification
When current industry is unattractive
and that the firm lacks outstanding
abilities or skills that it could easily
transfer to related products or services
in other industries, diversifying into an
industry unrelated to its current one.
Example is when company make a new
product that unrelated to your
industry.