Strategies Used by Companies in Pakistan Vertical Integration Forward Integration Horizontal Integration Backward Integration Intensive Strategies Market Penetration Market Development Product Development Diversification Strategies Related Diversification Unrelated Diversification Defensive Strategies Retrenchment Divestiture Liquidation Generic Strategies Low Cost Leadership Best Cost Leadership Differentiation Low Cost Focus Best Cost Focus Achieving Strategies Joint Venture Cooperative Arrangement

1. Mansoor ul Ghani
MBA
473-2014
Strategies Used by Companies in Pakistan
Strategic Management
by
Dr. Faraz Aalam

2. Vertical Integration:
Forward Integration:
Forward Integration is a form of management control that involves companies in the
same supply chain belonging to one owner.
Example: Junaid Jamshed introduced J.
Horizontal Integration:
Horizontal integration is a strategy where a company creates or acquires production
units for outputs which are alike
Example: Uniliver bought Rafhan in 1998
Backward Integration:
Backward integration refers to a company buying or internally producing parts of its
supply chain.
Example: Adamjee Group introduced Adamjee Insurance for its own insurance.
Intensive Strategies:
Market Penetration:
A market penetration strategy involves focusing on selling your existing products or
services into your existing markets to gain a higher market share.
Example: Market penetration in mobile industry. Lenovo, Huawei and other brands
introduced their mobiles in Pakistan
Market Development:
A market development strategy involves selling your existing products into
new markets.
Example: Shan Masala explored new markets of Europe.
Product Development:
Product development is the process of designing, creating and marketing
new products or services to benefit customers.
Example: Pizza Hut introduced Tikka Flavor in Pakistan

3. Diversification Strategies:
Related Diversification:
A process that takes place when a business expands its activities into product lines that
are similar to those it currently offers.
Example: Bank Islami bought KASBL.
Unrelated Diversification:
Unrelated Diversification is a form of diversification when the business adds new
or unrelated product lines and penetrates new markets
Example: Engro went into various diverse Products e.g. Power Sector, Food etc.
Though its main business was fertilizers.
Defensive Strategies:
Retrenchment:
A strategy used by corporations to reduce the diversity or the overall size of the
operations of the company.
Example: In times of crisis, difficult decisions must be made and, given the severity of
the energy sector’s difficulties, measures such as the sacking of 4,000 employees at the
KESC may be understandable, if somewhat regrettable.
Divestiture:
Divestiture is when a company, government or other organization sells, shuts down or
otherwise eliminates a division or operating unit.
Example: It is long since known that Unilever Pakistan, would follow the Hindustan
Lever's way: divest the Dalda business. “Dawn”
Liquidation:
Liquidation is the process by which a company (or part of a company) is brought to an
end, and the assets and property of the company are redistributed
Example: Carvan East Fabrics Limited liquidated on 14/Sep/2015
Generic Strategies:
Low Cost Leadership:
Low Cost Leadership can be adopted by any company, and is usually employed where
the product has few or no competitive advantage or where economies of scale are
achievable with higher production volumes.
Example: Colgate toothpastes are focusing on low cost leadership.

4. Best CostLeadership:
Best Cost Strategy is giving customers more value for the money by emphasizing both
low cost and upscale difference, the goal being to keep costs and prices lower than
those of other providers of comparable quality and features.
Example: Suzuki provides with customer satisfaction ratings that rival those of much
more expensive cars
Differentiation:
A differentiation strategy calls for the development of a product or service that offers
unique attributes that are valued by customers and that customers perceive to be better
than or different from the products of the competition.
Example: Ufone introduced Many Offers to retain its customers.
Low Cost Focus:
A low cost focused strategy requires competing based on low price to target a narrow market.
Example: China Mobiles focuses rural population of Pakistan.
Best CostFocus:
A Best cost focused strategy requires competing based on best price to target a narrowmarket.
Example: Samsung focuses middle class population.
Achieving Strategies:
Joint Venture:
A joint venture (JV) is a business agreement in which the parties agree to develop, for
a finite time, a new entity and new assets by contributing equity.
Example: joint venture between the telecom operator and Tameer Microfinance Bank
Cooperative Arrangement:
A grant, as opposed to a cooperative agreement, is used whenever the awarding
office anticipates no substantial programmatic involvement with the recipient during the
performance of the activities.
Example: SSGC and USAID exchange internees.