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Strategies
Prentice Chapter 6 1
Corporate Strategy
Directional Strategy:
Three Grand Strategies:
Growth strategies
Stability strategies
Retrenchment strategies
Prentice Chapter 6 2
Corporate Strategy
Growth Strategies:
Most widely pursued strategies
External mechanisms:
Mergers
Transaction involving two or more firms in which
stock is exchanged but only one firm survives.
Acquisition
Purchase of a firm that is absorbed as an operating
subsidiary of the acquiring firm.
Strategic Alliance
Partnership of two or more firms to achieve
strategically significant objectives that are mutually
beneficial.
Prentice Chapter 6 3
Corporate Strategy
Concentration
Current product line in one industry
Diversification
Into other product lines in other industries
Prentice Chapter 6 4
Corporate Strategy
Vertical growth
Horizontal growth
Prentice Chapter 6 5
Corporate Strategy
Concentration:
Vertical growth
Vertical integration
Full integration
Taper integration
Quasi-integration
Backward integration
Forward integration
Prentice Chapter 6 6
Corporate Strategy
Concentration:
Horizontal Growth
Horizontal integration
Prentice Chapter 6 7
Corporate Strategy
Concentric Diversification
Conglomerate Diversification
Prentice Chapter 6 8
Corporate Strategy
Diversification:
Concentric:
Prentice Chapter 6 9
Corporate Strategy
Diversification:
Conglomerate:
Prentice Chapter 6 10
Corporate Strategy
Exporting
Licensing
Franchising
International Joint Ventures
Entry Acquisitions
Options Green-Field Development
Production Sharing
Turnkey Operations
BOT Concept
Management Contracts
Prentice Chapter 6 11
Corporate Strategy
Stability Strategies:
No change
Profit strategies
Prentice Chapter 6 12
Corporate Strategy
Retrenchment Strategies:
Turnaround
Selling out
Bankruptcy
Liquidation
Prentice Chapter 6 13
International Portfolio Analysis
2 Factors:
Countrys attractiveness
Market size, rate of growth, regulation
Competitive strength
Market share, product fit, contribution
margin, market support
Prentice Chapter 6 14