Growth Strategy

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it is based on the growth strategies used by the strategists

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Growth Strategy

  1. 1. Retail Strategy Presentation On Growth Strategies
  2. 2. <ul><li>Strategic Management </li></ul><ul><li>Growth Strategy </li></ul><ul><li>Concentration </li></ul><ul><li>Diversification Strategy </li></ul>We Talk About..!
  3. 3. <ul><li>Source: </li></ul><ul><ul><ul><ul><li>“ Strategic Management and Business policy” ; Azhar Kazmi </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ Strategic Management” by ‘ Virtual University of Pakistan ’ </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Robert Cooper, Winning at New Products: Accelerating the </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Process from Idea to Launch, Perseus Books Group. </li></ul></ul></ul></ul>
  4. 4. Strategic Management “ The art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objective.” Formulation Implementing Evaluating Objectives
  5. 5. Diversification strategy
  6. 6. Concentric Diversification: Adding new, but related, products or services. Example: AT&T acquired cable network companies and JV with AOL as well. Spinach of Mumbai acquired Sabka Bazaar. <ul><li>Five guidelines when concentric diversification may be an effective strategy are: </li></ul><ul><li>Competes in no- or slow-growth industry </li></ul><ul><li>Adding new & related products increases sales of current products </li></ul><ul><li>New & related products offered at competitive prices </li></ul><ul><li>Current products are in decline stage of the product life cycle </li></ul><ul><li>Strong management team </li></ul>
  7. 7. Conglomerate Diversification Adding new, unrelated products or services Example: Diversification of Wipro in Computers, Hair oils and Soaps. Diversification of RIL from polyester, Plastics, petrochemicals and Retail. Diversification of Bharti from Telecommunication, Insurance and Retail. <ul><li>Four guidelines when conglomerate diversification may be an effective strategy are : </li></ul><ul><li>Declining annual sales and profits </li></ul><ul><li>Capital and managerial talent to compete successfully in a new industry </li></ul><ul><li>Financial synergy between the acquired and acquiring firms </li></ul><ul><li>Exiting markets for present products are saturated </li></ul>
  8. 8. Horizontal Diversification: Adding new, unrelated products or services for present customers Examples: Airtel with Asklaila.com, Visa. Nokia Navigator service. NY Yankees baseball team merged with New Jersey Nets basketball team. <ul><li>Four guidelines when horizontal diversification may be an especially effective strategy are: </li></ul><ul><li>Revenues from current products/services would increase significantly by adding the new </li></ul><ul><li>unrelated products </li></ul><ul><li>Highly competitive and/or no-growth industry with low margins and returns </li></ul><ul><li>Present distribution channels can be used to market new products to current customers </li></ul><ul><li>New products have counter cyclical sales patterns compared to existing products </li></ul>
  9. 9. Concentration strategies
  10. 10. Forward Integration: Gaining ownership or increased control over distributors or retailers Example: Unilever’s Super value store Next By Videocon LM365 by Shrilalmahal group <ul><li>Six guidelines when forward integration may be an especially effective strategy are: </li></ul><ul><li>Present distributors are expensive, unreliable, or incapable of meeting firm’s needs </li></ul><ul><li>Availability of quality distributors is limited </li></ul><ul><li>When firm competes in an industry that is expected to grow markedly </li></ul><ul><li>Organization has both capital and human resources needed to manage new business of </li></ul><ul><li>distribution </li></ul><ul><li>Advantages of stable production are high </li></ul><ul><li>Present distributors have high profit margins </li></ul>
  11. 11. Backward Integration: Seeking ownership or increased control of a firm’s suppliers Example: ITC Choupal Saagar Reliance contract farming Nirula’s own manufacturing <ul><li>Six guidelines when backward integration may be an especially effective strategy are: </li></ul><ul><li>When present suppliers are expensive, unreliable, or incapable of meeting needs </li></ul><ul><li>Number of suppliers is small and number of competitors large </li></ul><ul><li>High growth in industry sector </li></ul><ul><li>Firm has both capital and human resources to manage new business </li></ul><ul><li>Advantages of stable prices are important </li></ul><ul><li>Present supplies have high profit margins </li></ul>
  12. 12. Horizontal Integration: Seeking ownership or increased control over competitors Example : Acquisition of Trinetra, Adani and Sabka bazaar by More, Reliance and Spinach Acquisition of Arcelor by Ispat India Ltd <ul><li>Four guidelines when horizontal integration may be an especially effective strategy are: </li></ul><ul><li>Firm can gain monopolistic characteristics without being challenged by federal government </li></ul><ul><li>Competes in growing industry </li></ul><ul><li>Increased economies of scale provide major competitive advantages </li></ul><ul><li>Faltering due to lack of managerial expertise or need for particular resources </li></ul>
  13. 13. Presented by:- Mayur Khathuria Mukesh Kumar Pooja Srivastava Vimal Vikas Lamohr Uday Sahu Thank You!

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