Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.
-
Upload
winfred-chambers -
Category
Documents
-
view
212 -
download
0
Transcript of Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.
![Page 1: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/1.jpg)
Copyright Atomic Dog Publishing, 2004
Chapter 5Corporate-Level Strategies
![Page 2: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/2.jpg)
Copyright Atomic Dog Publishing, 2004
Chapter 5: Key Issues
• Corporate profile (3 options)
• Corporate strategies (3 options)
• Different means of pursuing corporate growth
• When stability is better than growth
• The Boston Consulting Group (BCG) matrix
![Page 3: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/3.jpg)
Copyright Atomic Dog Publishing, 2004
The Corporate Profile: 3 Options
• Compete in a single industry: Allows a firm to specialize, but “all eggs are in a single basket.”
• Compete in related industries: Allows a firm to develop synergy among the business units.
• Compete in unrelated industries: Minimizes risk through diversification.
![Page 4: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/4.jpg)
Copyright Atomic Dog Publishing, 2004
Corporate Strategies: 3 Options
• Growth
• Stability
• Retrenchment
![Page 5: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/5.jpg)
Copyright Atomic Dog Publishing, 2004
Types of Growth Strategies
• Internal Growth
• Horizontal Integration
• Horizontal Related Diversification
• Conglomerate (Unrelated) Diversification
• Vertical Integration
• Mergers
• Strategic Alliances (Partnerships)
![Page 6: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/6.jpg)
Copyright Atomic Dog Publishing, 2004
Mergers, Acquisitions, &Strategic Alliances
• A merger occurs when two or more firms, usually of roughly similar sizes, combine into one through an exchange of stock.
• An acquisition is a form of merger whereby one firm purchases another, often with a combination of cash and stock.
• Strategic alliances (partnerships) occur when firms agree to share the costs, risks, and benefits associated with pursuing new business opportunities.
![Page 7: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/7.jpg)
Copyright Atomic Dog Publishing, 2004
When Stability May Be More Attractive Than Growth
• Industry growth is slow or non-existent.
• Costs associated with growth do not exceed its benefits.
• Growth may place great strains on quality and customer service.
• Large, dominant firms may not want to risk prosecution for monopolistic practices.
![Page 8: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/8.jpg)
Copyright Atomic Dog Publishing, 2004
Retrenchment Strategies
• Turnaround (most conservative)—often involves layoffs
• Divestment
• Liquidation (most extreme)
• A retrenchment strategy is often accompanied by a reorganization process known as corporate restructuring.
![Page 9: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/9.jpg)
Copyright Atomic Dog Publishing, 2004
Case Analysis Step 9: Identify the Corporate Strategy
• What is the corporate profile?
• What is the corporate strategy? Explain the details.
![Page 10: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/10.jpg)
Copyright Atomic Dog Publishing, 2004
Original BCG Matrix
High Relative
Market Share
Low Relative
Market Share
High Industry Growth Rate
Stars Question Marks
Low Industry Growth Rate
Cash Cows Dogs
![Page 11: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/11.jpg)
Copyright Atomic Dog Publishing, 2004
BCG Matrix Options for Strategic Managers
• Build market share with stars and question marks
• Hold market share with cash cows
• Harvest (milk) as much short-term cash as possible
• Divest a business unit
![Page 12: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/12.jpg)
Copyright Atomic Dog Publishing, 2004
Global Corporate Strategy Options
• Involvement at the international level (minimal)
• Involvement at the multinational level (moderate)
• Involvement at the global level (maximum)
![Page 13: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/13.jpg)
Copyright Atomic Dog Publishing, 2004
Global Corporate Strategy Option 1:Involvement at the International Level
• Importing
• Exporting
• International licensing
• International franchising
• Strategic alliances
![Page 14: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/14.jpg)
Copyright Atomic Dog Publishing, 2004
Global Corporate Strategy Option 2:Involvement at the Multinational Level
• Direct investments in other countries
• Subsidiaries operate independently from each other
![Page 15: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/15.jpg)
Copyright Atomic Dog Publishing, 2004
Global Corporate Strategy Option 3:Involvement at the Global Level
• Direct investments abroad
• Subdivisions are interdependent
![Page 16: Copyright Atomic Dog Publishing, 2004 Chapter 5 Corporate-Level Strategies.](https://reader035.fdocuments.in/reader035/viewer/2022072014/56649e755503460f94b76b00/html5/thumbnails/16.jpg)
Copyright Atomic Dog Publishing, 2004
Global Orientation Considerations: Determining which option is most appropriate
• Are customer needs abroad similar to those in the firm’s domestic market?
• Are differences in transportation and other costs abroad conducive to producing goods and services abroad?
• Are the firm’s customers or partners already involved in global business?
• Will it be difficult to distribute goods and services abroad?
• Will government trade policies facilitate global expansion?
• Can managers in one country learn from managers in other countries?