STRATEGIC MANAGEMENT ASSIGNMENT

ON OTHER CORPORATE STRATEGIES

SUBMITTED BY: VARSHA KUMARI ENROL NO. : 00415603912 COURSE: MBA 2nd yr SECTION: A

CORPORATE LEVEL STRATEGIES

Strategies that detail actions to gain a competitive advantage through the selection and management of a mix of businesses competing in several industries or product markets Developing and implementing multi-business strategies may be necessary for effective use of excess resources, capabilities and core competencies that have value across several businesses. Strategy is formulated by top level management i.e. BOD,CEO or resident and VPs and concerned with organization long term survival and growth.

EXAMPLE: TATA GROUP

At TATA the corporate level strategy is formulated by top level management by its strategic management group

SUCCESSION PLANNING STRATEGY: cyrus mistry GROWTH STRATEGY: TATA GROUP strategic alliance with Japanese telecom major NTT DOCOMO, various acquisition and joint ventures with fiat Starbucks etc. TURNAROUND STRATEGY: Tata power delhi distribution DISINVESTMENT STRATEGY: tata oil mill was divested and sold to hindustan lever

TYPES OF CORPORATE LEVEL STRATEGIES

CORPORATE LEVEL STRATEGY

STABILITY STRATEGI
RETRENCHMENT STRATEGY COMBINATION STRATEGY

GROWTH STRATEGY
OTHER STRATEGIES

STABILITY STRATEGIES
NO CHANGE STRATEGY: Firms adopting this strategy maintain the same level of operations. Small business firms desire satisfactory level of operations rather than growth PAUSE AND PROCEED STRATEGY: Slow growth is more desired rather than maintenance of status quo. A sustainable growth strategy is more optimistic than the zero growth

Stability Strategy of Indian Companies Many companies in different industries have been forced to adopt stability strategy because of over capacity in the industries concerned. For Example: Steel Authority of India has adopted stability strategy because of over capacity in steel sector. Instead it has concentrated on increasing operational efficiency of its various plants rather than going for expansion. Others industries are heavy commercial vehicle, coal industry. Example: Apart from over capacity, regulatory restrictions in some industries have forced companies to adopt stability strategy. Cigarette, liquor industries fall in this category because of strict control over capacity expansion. Both these industries require license under the provisions of Industries (Development and regulations) Act, 1951. Growth or expansion Strategies If we look at the corporate performance in the recent years, we find how the various organizations have grown both in terms of sales and profit as well as assets.

GROWTH STRATEGY
Growth strategy is the means through which an organization plans to achieve its objective to grow in turnover and volume. There are four broad growth strategies which include; product development, diversification, market development and market

penetration. It is a style that seeks stock with future investment rates of return being great than the stocks.

RETRENCHMENT STRATEGY
Retrenchment is a corporate level strategy that aims to reduce the size or diversity of an organization. Retrenchment is also reduction in expenditure to become financially stable. Retrenchment strategy is a strategy used by corporates in order to reduce the diversity or to cut the overall size of the operations of the company. This strategy is often used to cut down expenses with the goal of becoming more financially stable business. Typically the strategy involves withdrawing from certain markets or the discontinuation of selling certain products or services in order to make a beneficial turn around.

COMBINATION STRATEGY
A combination strategy is a resource used by corporations or businesses to further their identified business goals at the same time. Usually, businesses pursue goals like growth, consolidation or other interests that include stability, with the aim of improving their overall performance. Some strategies that may be combined include differentiation, cost and the system by which a company focuses on an identified market niche. All of these strategies are geared toward increasing or improving the competitive advantage of a business. One of the components of combination advantage is the differentiation strategy. This strategy involves a targeted effort by a business to make its product or service to be perceived as unique and innovative in a market that is full of similar products or services. Companies use various methods to confer this feeling or perception of uniqueness upon their own brand of a product, which already exists in different forms. Such methods include

unique packaging, mystery ingredients, or clever promotions. The uniqueness of the product or service is the differentiating factor.

OTHER CORPORATE STRATEGIES

CONCENTRATION STRATEGY

PROGRAMMED STRATEGY

CONTINGENCY STRATEGY

BLUE OCEAN STRATEGY

RED OCEAN STRATEGY

CONCENTRATION STRATEGY
Concentration strategy is a type of approach that is used in both business and investment situations. As an approach to doing business, the strategy involves a company choosing to focus most of its resources on the development of a specific product or at least a small group of products that are aimed at a specific market. As an approach to investing, a concentration strategy calls for choosing a small group of stocks to compose the portfolio, rather than going for a more diversified collection of

investments. There are benefits as well as potential liabilities associated with using a concentration strategy, including the potential of being so invested in one market that a sudden economic turndown could lead to failure. As applied in a business operation, the purpose of a concentration strategy is to provide a singular focus to the product line, and the market in which the company chooses to compete. Doing so can sometimes lead to that particular business being viewed as a specialist or expert in a given industry, since all resources are aimed at creating and marketing the best possible products in that field. At times, a company may choose this course of specialization and achieve so much success that it begins to set the standard in that industry, providing the benchmark to which competitors must aspire in order to remain in business.

EXAMPLE: DOMINOS PIZZA To target a large amount of people and allow dominos to become the number one pizza delivery company. Dominos successful concentration strategy has allow to become a leading international presence and rank as the second largest pizza company in the world based on number of units.

PROGRAMMED STRATEGY
A programmed strategy which is planned in detail and integrated way it is difficult to change it has been implemented. These strategies emirate from first generation planning and is suitable for stable environment with people who prefer well defined goals.

EXAMPLE: DABUR INDIA LTD Its indias leading FMGC companies and its today indias most trusted name and worlds largest Ayurvedic and health care company It always set new standards in corporate governance and innovation.

CONTINGENCY STRATEGIES
Contingency strategies are a result of the contingency plan. These strategies are devised for a specific situation where things could go wrong. These strategies prepares the organization or the person for anything that could happen in future. They are the back up plans that support the organization when the actual plan fails. These strategies deal with specific variances to assumptions that result in a specific problem, emergency or state of affairs. EXAMPLE: CANTOR FITZGERALD It is a financial service firm. Founded in 1945,cantor is a capital markets investment bank servibg more than 5,000 institutional clients. It is a prominent example of successful implementation of contingency strategy. In the space of two hours the firm lost its 658 of its 960 new york employees in 9/11 attack, as well as much of its office space and trading facilities.

RED OCEAN AND BLUE OCEAN

In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here, companies try to outperform their rivals to grab a greater share of existing demand. Blue oceans, in contrast, are defined by untapped market space, demand creation, and the opportunity for highly profitable growth. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Value innovation is the cornerstone of the blue ocean strategy. Here, value innovation is innovation is more than innovation. It is about strategy that embraces the entire system of a companys activities. Value innovation requires companies to orient the whole system toward achieving a leapin value for both buyers and themselves. Absent such an integral approach, innovation will remain divided from the core of strategy. Competition-based red ocean strategy assumes that an industrys structural conditions are given and that firms are forced to compete within them, an assumption based on what the academics call the structuralist view, or environmental determinism. In contrast, value innovation is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players; the blue ocean concept calls this the Reconstructionist view.

In the red ocean, differentiation costs because firms compete with the same best-practice rule. Here, the strategic choices for firms are to pursue either differentiation or low cost. In the Reconstructionist world, however, the strategic aim is to create new best-practice rules by breaking the existing value cost Tradeoff and thereby creating a blue ocean. This differs from the combination and recombination that have been discussed in the innovation literature. This is different from combination and recombination is about recombining existing technologies or productive means, often focusing on the supply side only. The basic building blocks for reconstruction are buyer value elements that reside across existing industry boundaries. By focusing on the supply side, recombination tends to seek an innovative solution to the existing problem. Looking at the demand side, in contrast, reconstruction breaks away from the cognitive bounds set by existing rules of competition. It focuses on redefining the existing problem itself; it is about reconstructing existing buyer value elements to create a new form of product offering. Redefining the problem usually leads to changes in the entire system and hence a shift in strategy, whereas recombination may end up finding new solutions to subsystem activities that serve to reinforce an existing strategic position. Reconstruction reshapes the boundary and the structure of an industry and creates a blue ocean of new market space. Recombination, on the other hand, tends to maximize technological possibilities to discover innovative solutions.

RED OCEAN EXAMPLE: MICROMAX The idea of cheap and best best works into india. Before micromax came into market, the cheap mobile phone market was almost completely dominted by chinese imports.

BLUE OCEAN EXAMPLE: tata global beverages Tata global beverages an innovative vitamin launched dirk called Activate after establishing a strategic alliance with tornante company of united states. In india this beverage is available in tata starbuks store which are placed in metro cities.