2. STRATEGY
Strategy (Greek "στρατηγία"—stratēgia, "art of troop
leader; office of general, command, generalship") is a
high level plan to achieve one or more goals under
conditions of uncertainty.
Strategy is important because the resources available
to achieve these goals are usually limited.
Henry Mintzberg from McGill University defined
strategy as "a pattern in a stream of decisions"
3. MEANING
GRAND STRATEGIES
Grand strategies are the decisions or choices of long term
plans from available alternatives.
Grand strategies also called as master or corporate strategy.
It is based on analysis of internal and external environment.
They involve Expansion, Quality Improvement, Market
Development, Innovation, Liquidation, etc.
Usually they are selected by top level managers such as
directors, executives etc.
6. Stability Strategy
• A strategy is stability strategy when a firm attempts to
maintain its status-quo with existing levels of efforts and it
is satisfied with only incremental growth/improvement by
marginally changing the business and concentrates its
resources where it has or can develop rapidly a meaningful
competitive advantages in the narrowest possible product
market scope.
• Absence of significant change:- i.e. continuing to serve the
same clients by offering the same product or service,
maintaining market share, and sustaining the organization's
return-on investment.
7.
8. GROWTH STRATEGY
• Growth Strategies are means by which an organization
plans to achieve the increased level of objective that is
much higher than its past achievement level.
• Organizations may select a growth strategy
– to increase their profits, sales or market share.
– to reduce cost of production per unit.
– increase in performance objectives.
9.
10. RETRENCHMENT STRATEGY
• It is followed by when an organization substantially
reduces the scope of its activities.
• This strategy is often used in order to cut expenses
with the goal of becoming a more financial stable
business.
• Typically the strategy involves withdrawing from
certain markets or the discontinuation of selling
certain products or service in order to make a
beneficial turnaround.
11.
12. COMBINATION STRATEGY
• Combination strategy is not an independent classification but it is a
combination of different strategies – stability, growth, retrenchment – in
various forms.
• It also know as Mixed or Hybrid Strategy.
• Thus the possible combinations of strategies may be:
– Stability in some businesses and growth in other businesses
– Stability in some businesses and retrenchment in other businesses
– Growth in some businesses and retrenchment in other businesses
– Stability, growth and retrenchment in different businesses.
14. Reasons for following
• Different products in different product life cycle
– When different products of the organization are at different
product life-cycle stages, they require different types of
investment.
• Business Cycle
– Business cycle may affect the prospect of various businesses
differently.
• Number of businesses
– When the number of businesses in an organization has gone
beyond the optimum number, they are required to be reduced
because some business may not be that attractive from longterm point of view.
15. BENEFITS
• Developing competitive advantage and achieving large market
share.
• The firm is comparatively more protected from the impact of
downward trend in the industry.
• The firm can bear the pressures put by suppliers in the form of
increasing prices of their supplies as well as customers in the
form of bargaining for lower product price.
• Cost advantage acts as an entry barrier
16. DRAWBACKS
• It can be sustained only if barriers exist that prevent
competitors from achieving the same low cost.
• Severe cost reduction may dilute customer focus and
customer interests may be ignored,
• Customers requiring extra features and ready to pay higher
price are lost.
