Corporate level strategies

These are basically about the choice of direction that a firms adopts in order to achieve its objectives. These are basically for the basic direction of a firm as a whole.

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Corporate level strategies are basically about the decisions related to allocating resources among the different business , transferring resources ,managing and nurturing a portfolio of business in such a way so that overall objectives can achieved.

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Can be
Stability Expansion Retrenchment Combination

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Dimensions of grand strategy

Internal/external Internal -independent External- dependent Related/unrelated Related -similar Unrelated -different
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Horizontal/vertical Horizontal when firm adopts a strategy resulting in serving additional customer group. Vertical when an org adopts a strategy which result in expansion or contraction of existing business

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Active/passive Active - offensive Passive - defensive

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Stability strategies
Neutral strategy is one which aims at maintaining the existing business course without any significant variations or minor changes if needed

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Features of stable strategies

Status quo orientation Incremental improvements No redefinition of the business Fairly a quite modest strategy

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Conditions
level of managerial satisfaction Managerial reading of future The degree of resistance to change Lack of resources Threats by external environment Follow the same objective

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It can be
No change strategy Profit strategy Pause or with caution strategy

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Expansion strategies
A firm turns to expansion strategy when its seek sizeable growth. It is an attempt to grow either by intensification or by diversification.

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This strategy is followed when an org aims at high growth by broadening the scope in terms of customer group, functions & technologies.

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Features
It is the mark of exponential growth It involves redefinition of the business It is highly versatile strategy The two routes to expansion It is a generic strategy

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Conditions
Survival rests on growth Growth is managerial motivation Moving from loss to profit

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types
Expansion through concentration Integration Diversification Cooperation Internationalization

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Concentration( STICK TO THE KNITTING)

Involve investment of resources in a product line for an identified market with the help of proven technology.

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Integration
RELATED WITH COMBINING ACTIVITIES RELATED TO PRESENT ACTIVITY OF A FIRM.

Backward integration Vertical integration

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Expansion through diversification

Concentric (RELATED) Market related Technology related Market & technology related Conglomerate Unrelated to the existing business

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Expansion through cooperation

Mergers Takeovers Joint ventures Strategic alliances

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MERGER
Is a combination of 2 or more organisations in which one acquires the assets and liabilities of other in exchange of..

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Types
Horizontal Vertical Concentric conglomerate

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Take over
6 step procedure for acquisitions Spell out objectives Indicate how objectives would be achieved Assess managerial quality Check compatibility Anticipate Treat with dignity
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Joint venture
J.V. is a case of consolidation where 2 or more companies form a temporary partnership for a specified purpose.

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Types
Between two firms in one industry Between two firms across different industries Between an Indian firm and a foreign company in India b/w an Indian firm and a foreign co. in that foreign country b/w an Indian firm and a foreign co. in a third party.
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STRATEGIC ALLIANCE
Two or more firms unite to pursue a set of agreed upon goals but remain independent

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Types
Procompetitive alliances( low interaction/low conflict) Non competitive high interaction/low conflict) Competitive ( high interaction/high conflict) Precompetitive( low interaction/high conflict)
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internationalization
is based on Factor conditions Demand conditions Related and supported industries Firm strategy and rivalry

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HIGH

CO ST PRE SSU RE

GLOBAL STRATEGY

TRANSNATIONAL

INTERNATIONAL

MULTIDOMESTIC

LOW HIGH LOW

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ENTRY MODES
Export entry modes Contractual entry modes Investment entry modes

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Retrenchment strategies
Retrenchment strategy is one in which the level of objectives leads to below the past achievement.

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Reasons
Poor performance Threat to survival Redeployment of resources Insufficient resources

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Variants of retrenchment strategy

Turn around

Divestment

Harvest

Liquidation

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Turn around strategy

strategy involves those strategic actions which an organization takes to compete in the same business in turnaround situations

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Conditions for turnaround

Negative cash flow Negative profits Declining market share Mismanagement

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Approaches
Change in the top management Designing strategic turnarounds Designing operating turnarounds Revenue generating Cost cutting Asset reduction combination
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Divestment strategy
This strategy involves in selling off or liquidation of part of SBUs. It is a part of restructuring when a turnaround has been attempted but has proved to unsuccessful

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Need of divestment
Better utilize the resources To write of acquisition To manage financial crises Managing product portfolio

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Harvest Liquidation The act of reducing Is to sell of or close assets to minimum down the firm to , even sacrificing avoid bankruptcy the future profits for the purpose of generating enough cash

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Combination strategy
It is a mixture of stability, expansion or retrenchment strategies applied simultaneously or sequentially

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Need
The organization is large and faces a complex environment the organization is composed of different businesses so each of the industry required different response.

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Corporate restructuring
Corporate restructuring is necessary when a company needs to improve its efficiency and profitability and it requires expert corporate management. A corporate restructuring strategy involves the rebuilding of areas within an organization that need special attention from the management and CEO.
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