Corporate Strategy and Planning_Week4

8/16/2019 Corporate Strategy and Planning_Week4

1/15

Strategy Development

and the Bases of

Strategic Choice

Corporate Strategy Planning (CSP)

4


2/15

trategic Development Options

Corporate Purposes and

Aspirations

Competitive advantage

Enhancing BU trategy


3/15

trategic

Development

Options


4/15

Nature and Scope of Options

• Before developing Strategic Options, identify

Strengths and weaknesses.

• Also consider values, aspirations and prejudices.

• Then ask about the opportunities exist for them.

• Further choices could be;

– By means of its own efforts.

– By combining with others, such as joint venture or

– By acquiring another company


5/15

A Model of Strategic Choice

• Before developing a Strategy;

– What is the basis of the Strategy?

– Which direction is it going to take?

– How will it be carried out?


6/15

• Basis of the strategy:

Porter’s Generic Strategy Model

– Cost Leadership: based on being the lowest-cost producer, below

industry average price.

• Walmart: “everyday low prices” (EDLP), shoppers saves 15% from cart

– Differentiation: is where a company offers a unique product or

service

• McDonald: “One minutes in the line & 30 seconds at the counter” , “toy and meal”.

– Focus: is where a company concentrates on catering for a small

section of the market and so competes through being specialized.

• PepsiCo since 1970s


7/15

Alternative methods forcarrying out the strategy

• Internal development

– Developing products internally, rather than outside agencies

• Acquisition

• Joint venture/alliances


8/15

Direction of the strategy

• Withdrawal from the market. Resources can use elsewhere more

efficiently.

• Through consolidation, putting more investment to make it more

stronger.

• Taking the advantage of opportunities to increase the market

share, market penetration.

• Product development according to the fashion and taste changes.

•

Market development. Though exports…..• Market diversification to another product/market.

– Backward, forward and vertical diversification.


9/15

Corporate

purposes

and

aspirations


10/15

Ownership structures

• Sole Proprietorship

• Partnerships

• Private and public limited companies

• Co-operatives

• Mutual Societies

• Public Corporations (SOEs)


11/15

Competitive

advantage


12/15

Bowman‘s Strategy Clock


13/15

rice!"ased strategies

• No frills

• Low price

• Hybrid


14/15

Strategies for hypercompetitive

markets# $educing competition• Problems with hypercompetitive;

– Lowers overall profits of every company in the market

– Increases uncertainty and risk

– Customers tend be less brand loyal


15/15

Strategies for hypercompetitive

markets# $educing competition• Possible strategies to reduce rivalry;

– Increasing barriers to entry

– Agreements / strategic alliances

– Mergers / acquisitions

– Building brand loyalty

Documents

Corporate Strategy and Planning_Week4