A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem. The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word stratēgia, (art of troop leader; office of general, command, generalship) for generalship or leading an army.

1. Types of
Strategies

2. Strategy
 Amethod or plan chosen to bring about a
desired future, such as achievement of a
goal or solution to a problem.
 The art and science of planning and
marshalling resources for their most
efficient and effective use.
 The term is derived from the Greek word
stratēgia, (art of troop leader; office of
general, command, generalship) for
generalship or leading an army.

3. DEFINITION
 "Strategy is the direction and scope of an
organization over the long-term: which
achieves advantage for the organization
through its configuration of resources
within a challenging environment, to
meet the needs of markets and to fulfill
stakeholder expectations".
-Johnson and Scholes
(Exploring Corporate Strategy)

4. T
Y
P
E
S OFSTRATEGIES
STRA
TEGIES
INTEGRATION
INTENSIVE
DEFENSIVE
DIVERSIFICATION

5. I. INTEGRA
TION
 Integration means combining activities
related to present activities of a firm.
 Integration is an expansion strategy as an
expansion strategy commits itself to
adjacent businesses.
 It is an important element in the process
of improving organizational performance
because it facilitates the continuous
alignment of business strategies within the
ever changing business environment.

6. T
ypes
Integration
Vertical
Forward
Backward
Horizontal

7. A. Vertical Integration
Strategy
 It is the process in which several steps in the
production/ distribution of a product or service
are controlled by a single company/ entity, in
order to increase that company’s/ entity’s power
in the market place.
 E.g. Steel Company owned mills where the steel
was manufactured, mines where the iron ore
was extracted, coal mines that supplied the coal,
ships and railroads that transported the
material, etc.

8. Advantages Disadvantages
Reduce Monopolization of
transportation cost markets
Improve supply Potentially higher
chain coordination cost due to the lack of
Increase entry suppliers competition
barriers to potential Increase
competitors bureaucratic costs
Capture upstream Decreased
&downstream profits flexibility

9. Forward
vertical
Backward

10. Forward and Backward
i. Forward
 A business takes over/ mergers with a
business at the next stage of production
 E.g.table maker joins with a furniture shop
ii. Backward
 A business takes over/ mergers with a
business at the previous stage of production
 E.g.a table maker joins with a tree cutter

11. B. Horizontal Integration
Strategy
 It occurs when there is a merger between
two firms in the same industry operating
at the same stage ofproduction.
 E.g.
two table maker join together
A radio station that also owns a
newspaper and magazine.

12. Advantages Disadvantages
Economics of scale:
Selling more of the same
product in different parts
of the world
Increased Market
Power
Reduction in cost
Increased work load
Increased
Responsibilitie
s
Creating a monopoly

13. II. IntensiveStrategy
Intensive
Market
penetration
 The strategies require intensive efforts if a firm’s
competitive position with existing products is to
improve.
Market
development
Product
development

14. A. Market Penetration
 A market penetration strategy seeks to
increase market share for present
products or services in present markets
through greater marketing efforts.
 Market penetration includes increasing
the number of salespersons, increasing
advertising expenditures, offering
extensive sales promotion items, or
increasing publicity efforts

15. B. Market Development
 It deals with adding products in
different geographic areas.
 Introducing present products or
services into new geographic
areas
 E.g.wal-mart stores (60)

16. C. Product Development
 It deals with increasing the sales
as well as revenues by enhancing
the quality of existing products.
 It is strategy that seeks increased
sales by improving or modifying
present products or services.

17. III. Defensivestrategy
 A management approach designed to
reduce the risk of loss.
 Mainly used by market leaders in SM.
 Goal- hold onto your position as the
market leader & fighting off
competitors who try to take away
your market share.

18. types
Defensive
Retrenchment
Divestiture
Liquidation

19. A. Retrenchment
 A strategy used by corporations to reduce
the diversity or the overall size of the
operations of the company.
 Typically the strategy involves
withdrawing from certain markets or the
discontinuation of the selling certain
products or services in order to make
beneficial turnaround.

20. B. Divestiture
of an
 Selling a division or part
organization.
 Often is used to raise capital for further
strategic acquisitions or investments.
C. Liquidation
 Involves selling a company, in its
entirety or in parts, for the value of its
assets.

21. IV. DiversificationStrategy
 It seeks to increase profitability
through greater sales volume
obtained from products & new
markets.
 The main purpose of these strategies
are to allow the company to enter
lines of business that are different
from current operations.

22. Types
Diversification
Related Unrelated

23. A. Related Diversification
( Concentric)
 Aprocess that takes place when a business
expands its activities into product line s
that are similar to those it currently
others.
 E.g. a manufacturer of computers might
begin making calculators as a form of
related diversification of its existing
business.

24. B. Unrelated Diversification
(Conglomerate)
 A term which refers to the
manufacturer of diverse products
which have no relation to each other.
 E.g. a toy manufacturer that is also
manufacturing industrial wiring for
the construction industry.