This document discusses various grand strategies and turnaround strategies. It begins by listing group members and their grand strategy group. It then provides definitions and explanations of grand strategies, including the three main types of grand strategies - growth, stability, and retrenchment. Examples of turnaround strategies are also given, such as Dell's 2008 turnaround strategy which involved cutting costs, outsourcing manufacturing, and expanding indirect sales channels. Marketing strategies are also briefly discussed.
In this lesson you learned that there are four levels of strategy-making which includes Corporate Level, Business Unit Level, Functional Unit Level and Operational Level. You also learned that developing strategy is a collaborative team effort in which every manager has a role for the area he or she is responsible for.
Corporate level strategies are basically about the choice of direction that a firm adopts in order to achieve its objectives.
Corporate strategy is essentially a blueprint for the growth of the firm.
The corporate strategy sets the overall direction for the organization to follow.
It also spells out the extent, pace and timing of the firm’s growth.
In this lesson you learned that there are four levels of strategy-making which includes Corporate Level, Business Unit Level, Functional Unit Level and Operational Level. You also learned that developing strategy is a collaborative team effort in which every manager has a role for the area he or she is responsible for.
Corporate level strategies are basically about the choice of direction that a firm adopts in order to achieve its objectives.
Corporate strategy is essentially a blueprint for the growth of the firm.
The corporate strategy sets the overall direction for the organization to follow.
It also spells out the extent, pace and timing of the firm’s growth.
Strategic Management - Module 2 – MG University - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
Strategic Management - Module 2 – MG University - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
PORTFOLIO RESTRUCTURING/BUSINESS PORTFOLIO ANALYSIS:
Large diversified organizations basically use combination strategy. For example: an organization may simultaneously seek growth through the acquisition of new businesses, employ a stability strategy for some of it existing businesses and divest of any other business which runs in loss.
It is very complicated to identify a consistent strategy for large diversified organizations, because a number of different business-level strategies need to be coordinated to achieve overall organizational objectives.
Business portfolio models are tools for analyzing: the relative position of each of an organization’s businesses in its industry & the relationships among all the businesses of the organization.
The well-known approaches to develop business portfolio include: BCG Matrix, GE 9 Cell, 7s Framework & Balance Score Card.
BCG Matrix is also known as BCG Growth-Share Matrix.
It states that the organization should have a balanced portfolio of businesses such that some generate more cash than they use and can support other businesses that need cash to develop & become profitable.
The role of each business is determined on the basis of two factors: the growth rate & market share
The vertical axis indicates the market growth rate which is the annual growth percentage of the market (current or forecasted) in which the business operates.
The horizontal axis indicates the market share dominance or relative market share. It is computed by dividing the firm’s market share (in units) by the market share of the largest competitor.
The matrix is the combination of rows & columns. The growth-share matrix has four cells.
A star is the market leader in a high growth market (HMS & HMG). They are question mark business that become successful.
The organization has to spend a great deal of money keeping up with the market’s growth rate & fighting off competitor’s attack.
Stars are often cash using category rather than cash generating. They are profitable units and provide high ROI as compared to others.
Hold strategy is maintained for this success and benefit from market growth by means of a Star.
Question mark is also known as problem child as it operates in high growth market, but low relative market share (LMS & HGR).
The term question mark or problem child is well chosen, because the organization has to think hard about whether to keep investing funds to become a star or it comes down to dog category.
Most business start off as question marks, in that they enter in a high growth market in which there is already a leader.
A question mark generally requires the infusion of a lot of funds to keep adding plant, equipment, personnel to keep up with fast growing market & it wants to overtake the leader.
Build strategy is appropriate for question mark as it increases share inorder to become a star by creating a new brand and a new target audience.
Question mark is also known as problem child as it operates in high growth.
Running head: Implementation Strategy 1
Jessica Richards
Purdue Global University
MT460-01: Management Policy and Strategy
December 20, 2018
Developing implementation action plan
Introduction: objectives
This implementation plan is designed for Andrews Company for the year ending December 31st 2023. The main purpose of developing this implementation plan is to develop comprehensive and multifaceted strategic action plans to help address issues that are critical to the success or failure of the company.
Objectives of different departments in the company:
Research and development
Some of the goals and objectives of this department include the following;
· To improve technical and analytical skills of personnel; with the increasing advancement in technology, this is the main objective of this department.
· To improve employee retention.
· To develop leadership abilities and potential of the team hired.
Finance department
· To increase revenue; since the company’s current revenue ($40,800) is less than the potential expenses leading to a net loss and an increase in operating income of $4,839, the company plans to increase its revenue to reduce the increased operating income.
· To manage costs; this objective goes hand in hand with the objective to increase revenue. The company pan to manage costs as it grows.
· To maintain appropriate finance leverage; the company plans on increasing debt from $58,433 to some higher value since debt financing is cheaper as compared to equity financing.
· Diversify and increase revenue streams; the company plans on increasing sales of different products to increase its general revenue since the company only receives revenue from the sale of Able.
· To maintain profitability; the company plans on not only increasing its revenue and reducing thus increasing its profits but also to make it somehow constantly growing. Profitability of a company should not fluctuate much.
· To ensure financial sustainability; since the external environment is uncertain and out of control of the management, the company need to remain financially stable and this may sometimes encompass seeking outside sources of finance.
· To maximize shareholder’s wealth; the company since is a business unit plans to satisfy the business units’ common economic objective.
Marketing department
· To offer the best products; the department aims at providing the best products in the market to allure customers to the company’s products. This will happen especially when high tech is used to produce products. Some of the products that may be used include;
Name price
Bold $41.90
Dabble $44.50
Fast $42.50
Feast $42.50
· To increase market share; the company’s market share when high tech is used is 0.7% and 6.5% when low tech is used, therefore the company may decide to use low tech to produce products to increase its market share.
· To improve c ...
Strategies for weak & crisis ridden businessesApoorwaJaiswal
A firm in an also-ran or declining competitive position has four basic strategic options:
a. Offensive turnaround strategy – If it can come up with the financial resources, it can launch an offensive turnaround strategy keyed either to low cost or new differentiation themes
b. Fortify-and-defend strategy – Using variations of its present strategy and fighting hard to keep sales, market share, profitability, and competitive position at current levels
c. Fast-exit strategy – Get out of the business either by selling out to another firm or by closing down operations if a buyer cannot be found
d. End-game or slow-exit strategy – Keeping reinvestment to a bare bones minimum and taking actions to maximize short-term cash flows in preparation for an orderly market exit
CORE CONCEPT: The strategic options for a competitively weak company include waging a modest offensive to improve its position, defending its present position, being acquired by another company, or employing an end-game strategy.
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2. GROUP MEMBERS
• SANJU P CHERIYAN
• ASHILY.P.G.
• ATHIRA SUNDAR
• ABHISHEK
• JASEEM.K.K.
• JIJO MON JOSEPH
GROUP - SKIDS
3. • A “Grand Strategy” is a comprehensive general
strategy which provides the basis for strategic
direction that will accomplish the organization’s
long- term goals.
• General strategies are viewed by the organization
as necessary to the accomplishment of its mission
and the achievement of its preferred future.
GRAND STRATEGY
4. • Grand strategies may be short-term focused
organizational efforts or long-term far-reaching
initiatives.
• An organization should review and consider a
variety of widely used grand strategies before
deciding how to position itself to operate
successfully in its particular environment.
GRAND STRATEGY
5. • Grand strategies are major, overarching strategies
that shape the course of a business. Unlike tactics, they
are focused on the long-term goals of the business
• Grand strategies include three types of strategies
Growth
Stability
Retrenchment
THREE TYPES OF STRATEGIES
6. • In stability strategy, management maintains the
status quo if the company is doing well and does not
want to take risks associated with more aggressive
growth
• Both the growth strategy and retrenchment strategy
have a number of different ways to achieve the
results
Contd…
7. • Expanding strategy beyond military means to include
diplomatic, financial, economic, informational, etc.
means
• Examining internal in addition to external forces –
taking into account both the various instruments of
power and the internal policies necessary for their
implementation (conscription, for example)
• Including consideration of periods of peacetime in
addition to wartime.
Grand Strategy- Traditional Idea Of Strategy
11. TURNAROUND
• This strategy is designed to shift from a negative
direction to a positive one. This can be achieved by
restructuring the organizational operations in order to
restore the appropriate levels of profitability.
• A successful turnaround can be achieved by giving high
priority to the core business area and divesting from
diversified activities.
12. • Turnaround strategy means to convert, change or transform a
loss-making company into a profit-making company.
• It means to make the company profitable again.
• The main purpose of implementing a turnaround strategy is to
turn the company from a negative point to a positive one.
• If a turnaround strategy is not applied to a sick company, it will
close down.
• It is a remedy for curing industrial sickness.
CONCEPT OF TURNAROUND STRATEGY
13. • Turnaround is a restructuring strategy. Here, a loss-bearing
company is transformed into a profit-earning company, by
making systematic efforts.
• It tries to remove all weaknesses to help a sick company
once again become strong, stable and a profit-making
institution.
• It aids to reduce the brought forward losses of the loss-
making company.
CONCEPT OF TURNAROUND STRATEGY
14. • It tries to reverse the position from loss to profit, from
declining sales to increasing sales, from weakness to
strength, and from an instability to stability.
• It helps the sick company to stand once again in the market.
• It is a complete U-turn of a planned strategic economic
transition.
CONCEPT OF TURNAROUND STRATEGY
15. • In general, the definition of turnaround strategy can be
stated as follows.
“Turnaround strategy is a corporate practice designed and
planned to protect (save) a loss-making company and
transform it into a profit-making one.”
DEFINITION OF TURNAROUND STRATEGY
16.
17. • In ACADEMIC POINT of view, its definition can be stated as
under:
• “Turnaround strategy is an analytical approach to solve the
root cause failure of a loss-making company to decide the most
crucial reasons behind its failure. Here, a long-term strategic
plan and restructuring plans are designed and implemented to
solve the issues of a sick company.”
DEFINITION
20. • Some of the common features in turnaround situations are:
a. Changes in leadership
b. Redefining the company’s strategic focus.
c. Divesting or closing unwanted assets
d. Taking steps to improve the profitability
of remaining operations.
e. Making acquisitions to rebuild core operations.
FEATURES OF TURNAROUND STRATEGY
23. • Financial Institution, for example, some bank ‘A’ is suffering
from losses due to non-performing assets (NPA). NPA is loan
given but not yet recovered. This bank ‘A’ will follow turnaround
strategy and try to recover its loans by appointing recovery
agents.
• Manufacturing company say ‘XYZ’ is suffering from losses due to
excess idle time taken by labour to complete their jobs. The
manufacturing company ‘XYZ’ will follow turnaround strategy
to reduce labour inactivity by installing modern machines
(automation) to carry on the same work or job.
EXAMPLES
24. • Educational institution, for example, ‘C’ is suffering from
losses due to non-registration of students in their courses.
This institution ‘C’ will follow turnaround strategy to
reduce losses by providing facilities like e-Registration,
conducting online classes, etc. to attract students.
EXAMPLES
25. • Dell’s new retail business is not profitable as of now. So Dell aims
to make its retail computer business cost-effective by aligning
(reducing) manufacturing costs (cost of goods sold) with its
competitors.
• But this will be challenging since Dell does not have the same
volume in retail globally (as competitors), and therefore a smaller
fixed base to spread costs.
• Secondly, Dell’s supply chain had not exactly been designed for
mass distribution. HP uses a diversified supply chain unlike Dell’s
one supply chain approach.
Dell’s Turnaround Strategy in 2008
26. • Michael Dell, the founder of Dell returned as the CEO in January
2007.
• the company has a turnaround plan which it promises will yield
$3 billion in annual savings over the next three or four years.
• Dell’s plans include depending more on resellers and contract
manufacturers to cut costs and boost sales of which the consumer
personal computer business is expected to contribute more than
the current 15 percent of total revenue
The return of Michael Dell and the Turnaround Plan
27. 1.Cutting costs:
• Cutting costs is very important because competitors like
HP use the money from profitable printers operations
and take more market risk with designing innovative
products. Moreover the prices of computers keep going
down. One can buy a Dell laptop now for less than $500.
• 2. Moving away from computers internally and
outsourcing more of its manufacturing operations:
• Dell has manufacturing facilities in Texas, North
Carolina, Tennessee, and in Malaysia, Penang, China and
Poland.
Dell’s Turnaround Strategy
28. • 3.Moving into indirect sales channels like computer
resellers and retailers.
• 4.Introducing more products:
New product introduction is vital since major PC
manufacturers realistically only make money in the first
three months (or six in some cases) of a new product.
Dell’s Turnaround Strategy
32. WHAT ARE MARKETING
STRATEGIES?
Marketing strategies are a process of using
the marketing mix to satisfy and attract
consumers to make a profit for the
organization.
MARKETING Strategies
33. • link between corporate goals and
operational tactics
MARKETING
STRATEGY
34. There are two primary considerations in marketing strategy
– Where are we?
– Where do we want to go ?
35. A marketing strategy can serve as the foundation of
a marketing plan.
A marketing plan contains a set of specific actions
required to successfully implement a marketing
strategy
36. • A market development strategy involves selling your
existing products into new markets.
• Market development strategy entails expanding the
potential market through new users or new uses.
• There are a variety of ways that this strategy can be
achieved.
Contd…
37.
38. 1.New geographical markets
This could involve expanding outside of your region or
selling to a new country or a new continent.
The element of risk in adopting this strategy will depend
on whether or not you can use your established sales
channels in the new market.
MARKET DEVELOPMENT STRATEGIES
39. • New product dimensions or packaging
Your organization may simply want to repackage your product so
that it can open up a whole new market.
• If a company that sold industrial cleaning products in 20-liter
containers could break into the domestic market by repackaging in
smaller quantities and developing a suitable brand image.
• If you are responsible for packaging or production of the product
you will be required to look at the new costs involved with these
changes and new markets requirements and alter the marketing
messages so that they are appropriate to that country’s culture.
MARKET DEVELOPMENT STRATEGIES
40. • New distribution channels
Many companies have transformed themselves from high street
retailers into Internet retailers.
• As a manager you could be expected to outline the internal and
financial implications of such a change.
• Senior management would be looking for you to provide the details
of how to make this approach a success.
• This could include the training needs of employees so that they have
the skills to fulfill Internet orders, whether they are taking incoming
calls or processing online orders.
MARKET DEVELOPMENT STRATEGIES
41. • Different pricing policies to create a new market segment
The important aspect of this approach is whether or not
current users can easily alter their purchases to take
advantage of the new market pricing.
• A good example of how to protect your existing market
whilst developing a new one is Adobe Photoshop.
• It protected its price difference of hundreds of dollars of
its original professional product by offering a reduced
‘home’ version that had a restricted set of functions.
MARKET DEVELOPMENT STRATEGIES
42. • Whilst there are similarities between the first two
strategies, market development involves a greater degree
of uncertainty, risk, and financial commitment.
Contd…
43. • NEON basically doubled its market potential was when it
abandoned its initial feminine positioning (the "Hi!"
campaign) and expanded their target market to include
men. If Neon further expanded into fleet sales, this would
be an example of a new institutional segment adding to
market potential.
• The VOLKSWAGEN Beetle is increasing its market
potential by making its newest version more masculine
EXAMPLES
44. • EVIAN placed their bottled water in both the regular and health
sections of grocery stores. This expanded their market potential by
appealing to different psychographic segments—in effect
broadening their target market to include regular water drinkers
and health-seeking water drinkers (who perhaps before bought
specific heath drinks).
• MICA is a mineral that was originally used in industrial products.
But today it's found in everything from pearlescent automobiles to
sparkly cosmetics. So each producer of mica has expanded their
market potential by finding new uses for the product.
EXAMPLES
45. • Wal-Mart—three years after entering the Japanese market—was
losing money.
• They followed the same low-price strategy on lower-end products
that was so successful in the US.
• But Japanese consumers were not interested in low-end products
which they equated with low quality.
• So Wal-Mart plans to add more upscale products to their stores in
Japan.
• Wal-Mart said that they were "surprised" by the preferences of
the Japanese consumer. With a properly-executed market
development strategy there would be no such surprises
DANGER OF MARKET DEVELOPMENT