1. Organizational Level Strategies
Session 7
Salma Rahman

2. Business Goals
Goals or objectives convert the organization’s mission
into tangible actions and results that are to be
achieved, often within a specified time frame.
Three major categories of goals:
1. Production
2. Financial
3. Marketing

3. Corporate-Level
Strategy
Functional-Level
Strategy
Set of S. Alt. that an
org. chooses from as it
manages its
operations
simultaneously across
several industries &
Markets.
Set of S. Alt. that an
org. chooses from
as it conducts
business in a
particular industry
or market.
Developed for single
functional area.
Types
Business-Level
Strategy
Types of Strategic
Alternatives:

4. Organizational Levels of Strategies
• Action plans for each functional area
BUSINESS STRATEGIES
FUNCTIONAL STRATEGIES
CORPORATE STRATEGIES
• Type of
Business to compete in
• Competitive position
• Resource development
• How to compete in a particular market
• How to achieve competitive advantage

5. Organizational Strategic Plans
Organization
Level
Type of Plan Key Strategic Decisions
Corporate Corporate strategic
plan
• Corporate vision
• Corporate objectives &
resource allocation
• Corporate growth
strategies
• Business-unit composition
Business Corporate strategic
plan
• Market scope
• Competitive advantage
Marketing Marketing strategic
plan
Product marketing
plan
• Target market approach
• Marketing mix approach
• Specific target market
• Specific marketing mix
• Execution action plan

6. Corporate level strategies

7. Growth
Strategies
For org’l expansion
along some major
dimensions.
Retrenchment
Strategies
Involves shrinking
operations &
eliminating
unprofitable ones.
Downsizing.
Stability
Strategies
Call for maintaining
status Quo. Includes
Portfolio Strategies.
GRAND STRATEGIES
Provide strategic
direction at corporate
level.
Formulation of Corporate Level
Strategies

8. Growth
Strategies
Diversification Vs Single product
Other Growth Strategies
ACQUISITION (Purchase of all/part of org.)
MERGER (Combination of two firms)
JOINT WORKING (Two/ more firms working
together)
Integration
Vertical (Backward & Forward)
Formulation of Corporate Level
Strategies
Internal Growth

9. Tools for
Analyzing
Corporation and
Strategic choice
of businesses
Identify SBU
After identification of SBUs comes
the categorization
Formulation of Corporate Level
Strategies
G E Screen
B C G Matrix

10. Portfolio Models for Allocating
Resources - BCG MatrixMarketGrowthRate
Relative Market Share
High
High
Low
Low
10%
10x 0.1x1x
Star
Cash Cow Dog
Question Mark

11. Limitations of Growth Share Matrix
Mkt growth rate – an inadequate descriptor of overall
industry attractiveness
Relative Market share - an inadequate descriptor of
overall competitive strength
Outcomes of growth-share analysis are highly
sensitive to variations in how growth and share are
measured
Lack of guidance on how best to implement
investment strategies for each business
Model assumes implicitly assumes that all business
units are independent of one another except for the
flow of cash

12. GE MatrixMarketAttractiveness
Business Position or strength
High
Low
Medium
MediumStrong Weak
Business Strength
Low

13. Business Level Strategies

14. Portfolio Management
Techniques
Method of analyzing an
organizational mix of SBUs and
matching them with strategic goals.
SBU: Strategic Business Unit. Is a
division within firm with its own
mission, competitors, & strategy.

15. Formulation of Business Level Strategies (How
a particular business competes)
Porter's Generic Strategic Model
Structure-conduct-performance paradigm
Miles and Snow Typology
Strategic Orientation
Growth strategies
Ansoff’s Growth Share Matrix
Product Life Cycle Strategies

16. Focus Cost Leadership
Differentiation
No Differentiation
No Cost Leadership
No Focus
Scope of Target MarketNarrow Broad
Low
High
Each of the three strategies is based on having a
strong Differential Advantage so this factor is not
plotted.
Porter’s Generic Strategic Model

17. Text Page 27
Rivalry
Customer Bargaining
Power
Threat of
New Entrants
Threat of
Substitutes
Customer
Company
Supplier Bargaining
Power
Supplier
Company
PORTERS FIVE COMPETITIVE
FORCES MODEL

18. Miles & Snow Typology
Robert Miles and Charles Snow identified another
set of business strategies based on a business’s
intended rate of product-market development
(new product development, penetration of new
markets). They classify business units into four
strategic types:
prospectors, defenders, analyzers, and reactors

19. Miles & Snow Typology

20. Culture Response Style
Prospector
Reactor
Defender
Analyzer
Capitalize on Emerging Opportunities
Maintain the Status Quo
Reduce Operating Costs
Defend Stable Market, Aggressively
Enter Emerging Opportunities as
“Second In”
Implementation of Miles & Snow Typology

21. Alternative Corporate Growth
Strategies
Market Penetration Strategies
Increase usage rate or users
Product Development
Strategies
New product category
Market Development Strategies
Enter new geographical
market or
market segment
Diversification Strategies
Develop an entirely
new product for an
entirely new market
Current products New Products
Current
Markets
New
Markets

22. Alternative Corporate Growth
Strategies - Examples
Market Penetration Strategies Product Development
Strategies
Market Development Strategies Diversification Strategies
Current products New Products
Current
Markets
New
Markets
• Price reductions
• Advertising stressing the many benefits
of the product
• Packaging in different sized packages
• Making it available at more locations
• Offering a different version of an existing
product: mini-Oreos
• Offering a new-improved version of the
product: Gillette’s latest improvements in shaving
technology
•Offering new ways to use an existing product
• Arm & Hammer continues to seek new uses
for its baking soda
• McDonald’s
• Philip Morris, originally into cigarettes, diversified
into financial services, Post cereals, Sealtest
Dairy and Kraft Cheese
• Sara Lee acquired Coach Leather Products

23. Product Life Cycle
A concept that provides a way to
trace the stages of a product’s
acceptance, from its introduction
(birth)
to its decline (death).

24. Product Life Cycle
1. Like humans, Product also have Life
Cycle.
2. This term is applied to generic category
of product not to specific brands.
3. PLC consists of aggregate demand over
an extended period of time for all
brands in generic product category.
4. Length of PLC varies.
5. PLC is related to a market.

25. Product Life Cycle
Time
Dollars
Product
Category
Profits
Product
Category
Sales
Introductory
Stage
Growth
Stage
Maturity
Stage
Decline
Stage
0

26. Extending the PLC
Change product
Change product use
Change product image
Change product positioning

27. Introductory Stage
High failure rates Unpredictable conditions
Little competition Not Important
Frequent product modification Standards being
Developed
Limited distribution Selective Channels as
build up takes place
Negative profits High marketing and
production costs
Promotion Strategy Aim at early adopters
Promotion Emphasis Awareness and
information
Sales Promotion Intensive personal selling
to channels to stock
Full-Scale Launch
of New Products

28. Growth Stage
Competition Some emulators threatens
competitive advantage of firm
Strategy Market penetrations
Profits From high prices and Increasing
rate of demand
Goal is quality and ensuring distribution
Distribution Market consolidation through
intensive distribution
Promotion Strategy Emphasizes brand benefits
Emphasis Word of mouth; minimal advert
Prices Normally start to fall
Sales Promotion Build Brand preference
Offered in more sizes,
flavors, options

29. Maturity Stage
Competition Maximum competitors Declining
sales growth and Saturated
markets, Marginal competitors
drop out
Strategy Defend Brand position extend
product line by Stylistic product
changes
Prices What the market can bear, avoid
price war and profits fall
Promotion Strategy Use as a vehicle for differentiation
Promotion Emphasis Moderate since buyers are aware
Heavy promotions To encourage brand switching
convert buyers to loyal buyers
Market is fragmented Niche marketers emerge
Many consumer
products are in Maturity

30. Decline Stage
Competition Few with rapid shake out
Strategy Prepare for removal and milk the brand
Profits Decline as Long-run drop in sales due
to declining demand and push up costs
Prices Low to permit quick liquidation of Large
inventories of unsold items
Distribution Selective with unprofitable outlets
closed down
Promotion Strategy promote low price to reduce stock
Emphasis Elimination of all nonessential marketing
expenses
Rate of decline depends on
change in tastes or
adoption of substitute products