GRAND Strategies

1. RAJEEV GUPTA
0
MGNM571
Corporate Strategy
&
Entrepreneurship-I

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LEARNING OBJECTIVES
Ability to understand and define integration
strategies. Demonstrate ability to identify
appropriate Business predicaments to apply
integration strategies,
Ability to define and differentiate between
various Diversification strategies.
Demonstrating ability to identify appropriate
business predicaments to apply pursue
diversification strategies.
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5. News Article
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6. • Its two brands -- Dabur Honey and Dabur Chyawanprash - have over
Rs 500 crore in sales.
• ''At the end of fiscal 2021-22, we had 12 brands above Rs 100 crore in
size, two brands over Rs 500 crore in size and another four brands
that have a turnover above Rs 1,000 crore,'' Dabur India said in its
annual report.
• The four brands are Dabur Amla, Dabur Vatika, Dabur Red Paste and
juice brand Real.
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7. II. GROWTH STRATEGIES
•The most widely pursued corporate directional strategy are those
designed to achieve growth in sales, assets, profits or some
combination.
In a little over four years, the LED
business clocked ₹1400 crore in
revenue for the fiscal year 2018-19.

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10. This strategy aims at high growth by substantially
broadening the scope of one or more of its businesses. It
aims at the improvement of its overall performance in
business.
There may be five types of Expansion Strategies.
 Concentration
 Integration
 Diversification
 Cooperation
 Internationalization
EXPANSION STRATEGY

11. a) Expansion through concentration:
It is also called as intensification, focus or specialization strategy. It
involves concentration of resources on one or more of a firm business so
that it leads to expansion.
EXPANSIONS STRATEGY

12. News Article
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14. b) Expansion through Integration:
Integration means combining activities related to present activity of a firm.
It is an expansion strategy which involves integrating to any business
activity in the value chain ahead or backwards existing business of an
organisation.
Potato Chips Distribution
Backward Integration Existing business Forward
Integration
EXPANSIONS STRATEGY

15. INTEGRATION
• General motors began operating steel plants
• Dupont moved from gunpowder making onto
dynamite, nitro-glycerine, guncotton, and
smokeless power
• Fed Ex acquired Kinko’s Drop off and pick up
points for packages
Examples

16. ?
Can a paper production plant be
shared?
P & G manufactures paper towels and
diapers.
INTEGRATION

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INTEGRATION

18. VERTICAL & HORIZONTAL INTEGRATION
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Textile producer Textile producer
Shirt manufacturer Shirt manufacturer
Clothing store Clothing store

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20. • Reliance Retail said it has reached an agreement with Future Group to
acquire the latter’s retail and wholesaler business, and its logistics and
warehousing business for $3.4 billion. The acquisition will help
Reliance Retail command one-third of the bricks-and-mortar stores of
India’s modern retail sector.
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21. News Article
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22. FULL & TAPER INTEGRATION
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23. Diversification involves a substantial change in the business of the organisation.
Concrete Diversification:- When the new activity is related to existing business
activity.
Marketing Related, Technology Related, Marketing & Technology related
 Levi Straus jeans for men - expanded to jeans for women
and children (exploits product manufacturing capacity)
 Humana - hospitals and HMO's (exploits shared knowledge
of patient care)
 IBM - mainframes and PC (exploits brand identity/technology
through shared marketing/production/distribution efficiencies)
Conglomerate diversification: A strategy that plans to enter into an unrelated
business activity for eg. Godrej locks/ Almirahs/ Referigerators/Soaps.
C) EXPANSION THROUGH DIVERSIFICATION

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25. • In the last nine months, Ola Foods has launched three new brands --
Bowlsome, Paratha Experiment, and Meal Kits, and expanded its
selection under top-selling brand Khichdi Experiment. Ola Foods plans
to expand to 8-10 brands, and beyond the metros to smaller cities in
the coming year. "Khichdi Experiment was a category creator that
helped us create a playbook to build other brands... For instance,
within khichdi, today you have more than 60 such brands competing,”
• Ola’s food business competes with FreshMenu, Eat.fit, Rebel Foods-
owned Faasos, Lunch Box, and Behrouz.
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27. LEVELS & TYPES OF DIVERSIFICATION
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28. UNRELATED DIVERSIFICATION
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Virgin Travel (& Virgin Holidays)
Virgin Retail (Music & Entertainment)
Virgin Investments (computer products,
promotional blimps, property development)
Virgin Hotels Group (clubs & hotels in UK,
Spain & Virgin Islands)
Virgin Communications (Virgin Interactive
Entertainment, Publishing, Radio, TV)

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FORMS AND SCOPE OF DIVERSIFICATION
Geographic
Horizontal
• From one market
segment to another
• From one industry
to another
Wal-Mart
expanded into
Europe, Asia
Coke and
Pepsi expanded
into water

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EXAMPLE

31. EXAMPLE
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DIVERSIFICATION
Diversification process Types of businesses
Heavy reliance
on acquisition
Many seemingly
un-related
businesses
Primarily organic Many businesses
clustered in a few
related industries
Company
Product extensions/
new product lines
Few related
product lines

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34. It is a strategy which works on the possibility of mutual
cooperation with competitors; with the competition also going
at the same time.
Mergers:-
It is a strategy of two or more organisation in which one
acquires the assets and liabilities of the other in exchange of
share or cash.
Conglomerate mergers (2 unrelated firms)
Horizontal mergers (2 firms in same business)
Concentric mergers (2 related firms)
Vertical mergers (2 firms creating complementary products)
D) EXPANSION THROUGH COOPERATION

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THANK YOU
Rajeev Gupta