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TOPIC 6 STRATEGY FORMULATION (Corporate Level Strategies)
BPMN3023…
TOPIC 6 STRATEGY FORMULATION (Corporate Level Strategies)
BPMN3023 STRATEGIC MANAGEMENT, Universiti Utara Malaysia (UUM)
is a strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses
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Growth Strategy
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Aside from the illustration of internal growth strategies above, an organization can also grow externally through mergers, acquisitions and strategic alliances.
Concentration strategy
is a plan that a company uses to focus its resources on a specific product line/market with the goal of growing that business
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Diversification strategy
is a plan used by a company to enter new businesses or lines of operation that are distinct and different from its current operations.
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STABILITY STRATEGY
is a plan used by a company that is already successful and operating in a stable and predictable environment. It involves maintaining the current strategy that brought the company success, with little or no change. The goal is to maintain the company's current level of success, rather than trying to grow or change direction.
No Change Strategy: This strategy involves maintaining the current strategy exactly as it is, without making any changes. The company continues to do what has worked well for it in the past, and does not try to make any significant changes or improvements.
Coca-Cola is an example of a company that has used a no change strategy. Coca-Cola has maintained its traditional formula and branding, and has not made any significant changes to its products or marketing strategy.
Profit Strategy: This strategy involves making small, incremental changes to the current strategy in order to improve efficiency, reduce costs, or increase profits. The company is focused on maximizing its profits and returns, rather than making major changes or taking on significant risk.
Walmart is an example of a company that has used a profit strategy. Walmart has made small changes to its operations and logistics in order to reduce costs and increase efficiency, while continuing to offer the same products and services that have made it successful.
Pause/Proceed with Caution Strategy: This strategy involves slowing down or pausing the current strategy, in order to assess the company's situation and make any necessary changes. The company may take a step back and reevaluate its direction, or make small changes to its strategy in order to adjust to new circumstances.
Apple is an example of a company that has used a pause/proceed with caution strategy. Apple has slowed down its product release cycle in recent years, in order to focus on quality and make sure that its products are well received by customers.
Retrenchment Strategies
are used by companies when they are facing difficulties and need to improve their performance. These strategies can help the company get back on track and return to profitability.
Turnaround Strategy: This is when a company tries to reverse a decline by improving its operations and making the company more efficient.
American Airlines: American Airlines used a turnaround strategy to emerge from bankruptcy and become a more efficient and profitable company.
Divestment Strategy: This is when a company sells off some of its assets or units that are not performing well, in order to focus on areas that are performing better.
Yahoo!: Yahoo! used divestment as a strategy to improve its financial performance and focus on its core business of online search and advertising. The company sold off several of its non-core businesses, including its Yahoo! Japan and Alibaba businesses.
Liquidation Strategy: This is a last resort strategy, used when all other efforts to turn the company around have failed. The company closes down completely and sells off all its assets.
Blockbuster: Blockbuster was a video rental company that used a liquidation strategy after it failed to compete with the rise of online streaming services such as Netflix. The company closed its remaining stores and sold off its assets.