Schematic representation of vertical and horizontal integration in the automotive industry (Photo credit: Wikipedia)
World locations of Fiat Group automobile manufacturing sites (own,license and joint ventures). (Photo credit: Wikipedia)
Diversification (marketing strategy) (Photo credit: Wikipedia)
Chapter 5 – Strategies in Action
Chapter 5 provides basic guidelines for when various strategy options have historically been most effective.
These are the basic 11 types of strategies for a manufacturer of steel office desks:
- Forward integration: opens retail stores to sell its desks.
- Backward integration: purchases a steel mill to control its supply of steel at a reasonable price.
- Horizontal integration: purchases a competing desk manufacturer.
- Market Penetration: launches a loyalty program to reward a company that buys a large number of desks for their many global subsidiaries.
- Market Development: begins to offer desks in India, a new geographic market area for the company.
- Product Development: develops a special desk with a steel cabinet for electronics.
- Related Diversification: the company will now manufacture and sell steel chairs.
- Unrelated Diversification: the company will offer a credit card for its customers.
- Retrenchment: the company is cutting jobs in 20 markets in the west.
- Divestiture: the company is selling off its plastics division.
- Liquidation: the company is selling off the equipment previously used in its now defunct plastics division.
English: A desk for use on my wikipedia userpage. (Photo credit: Wikipedia)
Schematic representation of vertical and horizontal integration in the automotive industry (Photo credit: Wikipedia)
This chapter describes Porter’s generic strategies and other important strategy options inluding: outsourcing, reshoring, first-mover advantages, joint ventures, and partnering in the context of strategic planning.
Learning Objectives:
1. Define and discuss secondary buyouts and dividend recapitalizations.
2. Identify the benefits and drawbacks of merging with another firm.
3. Discuss the value of establishing long-term objectives.
4. Identify 16 types of business strategies.
5. Identify numerous examples of organizations pursuing different types of strategies.
6. Discuss guidelines when particular strategies are most appropriate to pursue.
7. Discuss Porter’s five generic strategies.
8. Describe strategic management in nonprofit, governmental, and small organizations.
9. Discuss the nature and role of joint ventures in strategic planning.
10. Compare and contrast financial with strategic objectives.
11. Discuss the levels of strategies in large versus small firms.
12. Explain the first mover advantages concept.
13. Discuss recent trends in outsourcing and reshoring.
Complete the Assurance of Learning Exercise #5C and tweet your answers to: What Strategies should PepsiCo pursue in 2014?
English: Porter Generic Strategies (Photo credit: Wikipedia)