Directional Strategies

• asking the following three questions:

• 1. Should we expand, cut back, or continue our operations
unchanged?
• 2. Should we concentrate our activities within our current industry, or
should we diversify into other industries?
• 3. If we want to grow and expand nationally and/or globally, should
we do so through internal development or through external
acquisitions, mergers, or strategic alliances
Directional Strategies
Growth Strategies
• designed to achieve growth in sales, assets, profits, or some
combination.
• To take advantage of experience curve to reduce per unit cost
• Can grow internally
• Expanding operations domestically or globally
• or externally
• Merger
• Acquisition/take overs
• Alliance
Why Grow- Reasons
• May mask flaws in co.
• Org slacks- un tapped opportunities
• Offer opportunities for advancements, promotions, increasing jobs
• Exciting and ego-enhancing for CEOs
Growth Strategies
• Concentration • Diversification
• Vertical Growth • Concentric/Related
• Forward integration • Strong competitive position but
• Backward integration industry attractive ness is low
• Continuum • Synergy
•
•
Full- 100
Taper- less than half
• Conglomerate/unrelated
• Quasi-more than half outsouce but partial cntrl • Lower risk
• Long term contract-sole suplliers
• Horizontal- multiple markets
• Int Entry options
• Exporting-sell to other foreigners
• Licensing-parent company
• Franchising-sop’s
• Joint Ventures-two-joined hands for venture
• Aqusition- acquire
• Green field Development-subsidery
• Outsourcing-
• Turnkey operations-jf thunder
• BOT- motorway
• Management contracts-experts
 Stability
• Pause /Proceed---Time out- (uncertain environment) govt. policies
• Incremental improvements
• No Change- ---do nothing new or willnot change anything for now-new govt.
• Profit- profit maximization by reducing the cost/expenses

Retrenchment Strategies --
– Turnaround-get out from existing business(downfalls in sales-mgt inefficiencieski wja s
huta hai- pin point 2 phases contraction(planning or identication identify and address
problems(stop bleeding)--- e.g PIA
– Consolidated-yh problem area or kon se problems adrees phly or bd me krny,
contingency plans kiya hain hmaray…. Planing ko implement rna hai hm n
simply. E.g fake worker nikal dyte hm
– Captive Company Strategy- industry me position strong nai hai- you are fair
tat some other will take you. LT contracts
– Selling out/divestment: ap running business sell krdyte due to good
money/koi product line sell krdty(walls/lakme)
– Bankruptcy: creditors/detors ko deny k lie paisy na hun tu ap apny assets
bech dyte court settlement- no seizse
– Liquidation:blacklisted termination of business court assets bech k settled
the claims and its completely siezed