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    3 Key Issues - : - Firm's Directional Strategy - Firm's Portfolio Strategy - Firm's Parenting Strategy

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    Govind Singh
    The document discusses 3 key issues in corporate strategy: directional strategy, portfolio strategy, and parenting strategy. It focuses on directional strategy, outlining 3 grand strategies of growth, stability, and retrenchment. Under growth strategies, it describes mechanisms like mergers and acquisitions as well as concentration strategies involving vertical and horizontal growth, and diversification strategies that are concentric or conglomerate.

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    3 Key Issues - : - Firm's Directional Strategy - Firm's Portfolio Strategy - Firm's Parenting Strategy

    Uploaded by

    Govind Singh
    27 views18 pages
    The document discusses 3 key issues in corporate strategy: directional strategy, portfolio strategy, and parenting strategy. It focuses on directional strategy, outlining 3 grand strategies of growth, stability, and retrenchment. Under growth strategies, it describes mechanisms like mergers and acquisitions as well as concentration strategies involving vertical and horizontal growth, and diversification strategies that are concentric or conglomerate.

    Original Title

    Corporate Growth Strategy

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    The document discusses 3 key issues in corporate strategy: directional strategy, portfolio strategy, and parenting strategy. It focuses on directional strategy, outlining 3 grand strategies of growth, stability, and retrenchment. Under growth strategies, it describes mechanisms like mergers and acquisitions as well as concentration strategies involving vertical and horizontal growth, and diversification strategies that are concentric or conglomerate.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    27 views18 pages

    3 Key Issues - : - Firm's Directional Strategy - Firm's Portfolio Strategy - Firm's Parenting Strategy

    Uploaded by

    Govind Singh
    The document discusses 3 key issues in corporate strategy: directional strategy, portfolio strategy, and parenting strategy. It focuses on directional strategy, outlining 3 grand strategies of growth, stability, and retrenchment. Under growth strategies, it describes mechanisms like mergers and acquisitions as well as concentration strategies involving vertical and horizontal growth, and diversification strategies that are concentric or conglomerate.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 18

    Corporate Strategy

    3 Key Issues –

    –Firm’s directional strategy

    –Firm’s portfolio strategy

    –Firm’s parenting strategy

    7-1
    Corporate Directional Strategies

    7-2
    Corporate Strategy

    Directional Strategy –

    –Orientation toward growth


    •Expansion, contraction, status quo
    •Concentration or diversification
    •Internal development or acquisitions, mergers, or
    alliances

    7-3
    Corporate Strategy

    Directional Strategy –

    –3 Grand Strategies

    •Growth strategies

    •Stability strategies

    •Retrenchment strategies

    7-4
    Corporate Strategy

    Growth Strategies --

    –External mechanisms

    •Mergers

    •Acquisitions

    •Strategic alliances

    7-5
    Corporate Strategy

    Growth Strategies --

    –2 Basic forms

    •Concentration

    •Diversification

    7-6
    Corporate Strategy

    Basic Concentration Strategies --

    –Vertical growth

    –Horizontal growth

    7-7
    Corporate Strategy
    Quasi-integrated firms need not own 100
    percent of the adjacent business units in
    the vertical chain. The bond between firms
    Vertical Growth -- could take the form of cooperative
    ventures, minority equity agreements,
    loans or loan guarantees prepurchase
    –Vertical integration credits, specialized logistical facilities or
    •Full integration "understandings" concerning customary
    arrangements. Quasi-integrated
    •Taper integration
    arrangements place greater proportions of
    •Quasi-integration ownership equity at risk, but they also
    •Long-term contract provide greater flexibility in responding to
    changing conditions than a contract may
    provide.

    Firms are "taper integrated" when they are backward or forward integrated but
    rely on outsiders for a proportion of their suppliers or distribution. Taper
    integration represents a useful compromise between desires to control adjacent
    businesses and needs to retain strategic flexibility. In this case, firms can monitor
    the R&D developments of outsiders, reduce vulnerability to strikes and shortages
    within their systems, and examine the products of competitors while enjoying the
    lower costs and greater advantages (and profit margins) or vertical
    7-8 integration.
    Corporate Strategy

    Vertical Growth --

    –Backward integration

    –Forward integration

    7-9
    Corporate Strategy

    Concentration --

    –Horizontal Growth
    •Horizontal integration

    7-10
    Corporate Strategy

    Basic Diversification Strategies --

    –Concentric Diversification

    –Conglomerate Diversification

    7-11
    Corporate Strategy

    Concentric Diversification --

    –Growth into related industry


    –Search for synergies

    7-12
    Corporate Strategy

    Conglomerate diversification --

    –Growth into unrelated industry


    –Concern with financial considerations

    7-13
    Corporate Strategy

    International Entry Options --

    –Exporting
    –Licensing
    –Franchising
    –Joint Ventures
    –Acquisitions
    –Green-Field Development

    7-14
    Corporate Strategy

    International Entry Options --

    –Production Sharing
    –Turnkey Operation
    –BOT Concept (Build, Operate, Transfer)
    –Management Contracts

    7-15
    Corporate Strategy

    Stability Strategies --

    –Pause/proceed with caution

    –No change

    –Profit strategies

    7-16
    Corporate Strategy

    Retrenchment Strategies --

    –Turnaround
    –Captive Company Strategy
    –Selling out
    –Bankruptcy
    –Liquidation

    7-17
    Corporate Strategy

    Portfolio Analysis --

    –Resource commitment on best products to


    ensure continued success

    –Resource commitment on new costly products


    high risk

    7-18

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