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STRATEGY MAKING TASKS IN VARIOUS INDUSTRY SETTINGS

(A) EMERGENT PHASE: e.g. e-banking, e-education, web commerce

• Strive for Industry leadership

• Technology Advancement & improve product features

• Form strategic alliances with by suppliers

• Price cuts for price-sensitive segment

• Seek early mover advantage

• Entry into new customer groups, new application areas, and new geographical areas.

• Seek aggressive advertising and promotion campaigns

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(B) GROWTH PHASE: (Reliance, Tatas; Dow Chemicals)

• Penetrate and acquire High Market Share

• Launch new products, expand market presence

• Scout for opportunities to enter into new business

• Exploit resource capabilities & internal advantages

• Look for potential firms for acquisitions

• Aggressively pursue R & D capabilities

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(C) MATURITY PHASE: Replacement Demand

Attracting new Buyer

e.g. FMCG Industry

• Prune down Product lines having low profit margins

• Improve Value Chain Capabilities (Better Services, Low Costs)

• BPR & HR Driven Cost Reduction

• Increase sales to existing customers Complimentary product offerings

• Expand Internationally Limited competition

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(D) STAGNANT/ DECLINING PHASE:

• Focus on those industry segments growing rapidly

• Differentiation based on successful innovation

• Aggressive Cost cutting Measures

• Finally, if perceived as unviable business

• Sell out the Firm

• Close Down Operations

• Diversify into other areasDivest/ Harvest

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SAMPLE FORMAT FOR DRAWING STRATEGIC ACTION PLAN:

1. VISION/ MISSION

2. OBJECTIVES

3. OVERALL BUSINESS

STRATEGY

SUPPORT/ FUNCTIONAL STRATEGIES

• Marketing

• Finance

• HR

• Operations

Actions to Improve Performance

• Immediate

• Long Run

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TRADITIONAL GRAND STRATEGIES:

The grand strategies provide an indication as regards the strategy options available for firms – depending on the environmental condition and life cycle of the industry

Traditional and commonly pursued grand strategies comprise the following:

(A) GROWTH STRATEGY: Firms strive towards enhancing growth rate – accelerating increase in market share, market reach an access market penetration AS FEASIBLE

(B) STABILITY CRITERIA: Firms work towards stabilizing and systemizing operations to the extent feasible – Stabilize operations and remain competitive

(C) INNOVATIVE PHASE:• AGGRESSIVE R & D ACTIVITIES• NEW PRODUCT DEVELOPMENT• TECHNOLOGY ADVANCEMENT

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(D) EXPANSION STRATEGY:

• Product Portfolio Increase

• Market Diversity

• Scout For Acquisition Partners

(E) DIVERSIFY OPERATIONS:

• Vertical & Horizontal Integration

• Related Diversification

• Unrelated/ Conglomerate Diversification

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(F) MERGERS/ ACQUISITIONS

• Merge To Enhance Firm Value

• Acquire Potential Firms

• Acquisition Based Growth Option

(G) DIVESTITUTE/ DISINVEST

• Shut Down Loss Making Units

• Divest Business At Dog Stage

• Disinvest/ Harvest – Sell Off Idle Assets

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(I) TURNAROUND STRATEGY

• Internal Measures

• External Measures

(J) RESTRUCTURING STRATEGY:

• ORG Restructuring HR Aspects

• Streamline & Revamp Business Processes

• Extensive BPR & Downsizing – If Read

(K) INTERNATIONAL LEVEL/ COLLABORATIVE STRATEGY:

• Expand Business Beyond Domestic Boundary

• Forge Strategic/ Business Alliance

• Extreme Form of Diversification/ Alliance Partnership

Focus on Core Business

Strengthen Core Areas

M & A

Diversify

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RESTRUCTURING/ TURNAROUND PROCESS

• Create SBU Concept• Focus on Core Business Ares• Extensive BPR Efficiency• Consolidation & Stability• M & A Create Value• Hive off Unproductive Assets• Divert Funds Problem Child

New Venture

HR ASPECTS

• Org. Downsize• Develop PMS• Training & Development• Productivity Boost

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RESTRUCTURING/ TURNAROUND PROCESS

FINANCIAL RESTRUCTURING

• DEBT SETTLEMENT

• DEBT REPLACEMENT & RESCHEDULING

• CAPITAL RESTRUCTURING

• IPO/ PUBLIC ISSUE

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GRAND STRATEGY: SELECTION OPTIONS

• Vertically Integrate• Conglomorate Diversification

• Turnaround• Divestiture• Liquidate

Overcome Weakness

• Focused Growth• Market Development• Product Development• Innovation

Maximizing Strengths

• Horizontal Integration• Concentric/ Related

Diversification• JVS/ Alliances

Internal(Redeploying

Resources within the firm)

External(Mergers/ Acquisition)

A

D

B

C

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STRATEGY CLUSTERS

• Concentrated Growth• Horizontal Integration• Divestiture• Liquidation

• Concentrated Growth• Vertical Integration• Concentric Diversification

RAPID GROWTH

• Diversification• JVS/ Alliances

SLOW GROWTH

• Divestiture• Liquidation• Turnaround Strategy• Aggressive Related/

Unrelated Diversification

Strong Competitive

PositionWeak Competitive

Position