Growth is one of the most discussed and lauded strategic options. It is equated with managerial success and achievement. An organization may grow by expansion (when it concentrates within a broad allied product market scope). Technology plays an important underlying role in growth in today’s context. It enables companies to design, develop and manufacture better…
Cut back strategies are those where the organization curtails or, in extreme cases, divests nonperforming assets, products, divisions. businesses, functions.
Under the Stability strategy, a company where stops the expenditure on expansion, do not introduce new products or venture into new markets rather decides to focus of the current portfolio and market share.
The first-mover arid late-mover strategies are basically related to the timing of strategic moves by an organization. Determination of the timing of strategic moves is important for every business organization. A firm may be the first-mover in launching a strategy to gain a competitive advantage in the marketplace. Or, the firm may wait and be…
An offensive strategy consists of a company’s actions directed against the market leaders to secure competitive advantage. Competitive advantage may be achieved as a cost advantage or differentiation advantage or resource advantage. An offensive strategy must be creative so that competitors cannot easily thwart it. Offensive strategies include a dramatic reduction of price, a highly…
A defensive strategy consists of a company’s actions directed for protecting its competitive advantage. A company pursues defensive strategies to protect competitive advantage through protecting existing market share. However, they can hardly create any competitive advantage. But they fortify the competitive position of the company. They also protect the resources and capabilities of the company….
The integration strategy consists of 2 types of strategies; Vertical Integration strategy, Horizontal integration strategy. Vertical Integration Vertical integration strategy combines backward integration and forward integration. It means that the vertical integration strategy involves extending the present business of a firm, in two possible directions. Advantages of Vertical Integration Companies involve themselves in vertical integration…
An acquisition occurs when one company purchases (or acquires) another company. It is a strategy through which one firm buys a controlling or 100 percent interest in another firm by making the acquired firm a subsidiary business within its portfolio. The first company (acquirer), after purchasing the company, absorbs the operations of the second company…
A merger takes place when; two or more organizations merge together and their operations are absorbed by a news organization. A merger is a strategy through which two or more organizations agree to integrate their operations on a relatively co-equal basis because they have resources and capabilities that together may create a stronger competitive advantage….
A joint venture refers to a new organization established by two or more organizations. It is an agreement where two or more firms hold equity capital in a venture.