Strategic Alliance Strategy
Strategic alliances are cooperative agreements between two or more firms to help each other in business activities for mutual benefits.
Vertical Integration Strategy: Advantages, Disadvantages, Types
Vertical integration strategy combines backward integration and forward integration. Vertical integration strategy expands business backward into the sources of supply and forward toward the users of the products. What is Vertical Integration? Vertical Integration is the degree to which a firm’s production system or service facility handles the entire supply chain. It is an arrangement…
Horizontal Integration Strategy
Horizontal integration refers to having ownership in competitors’ firms. When a company adopts this strategy, it purchases a firm that produces similar products in the industry. Many companies use a horizontal integration strategy as a growth strategy. This strategy is usually implemented through mergers and acquisitions. Combinations of two pharmaceutical companies, two sweater manufacturing firms,…
Joint Venture Strategy: Definition, Advantages, Difficulties with JV
A joint venture refers to a new organization established by two or more organizations. It is an agreement where two or more firms hold equity capital in a venture.
Mergers & Acquisitions: Meaning, Process, Example, Advantages, Disadvantages
Mergers & Acquisitions have become a common strategy to consolidate the business. The basic aim is to reduce cost, reap the benefits of economies of scale, and expand market share. For many people, mergers simply mean sharing resources and costs to increase bottom lines. However, it is not as simple as it sounds. According to…
Outsourcing Strategy: Streamline Business Activities With Outsourcing
Outsourcing strategy refers to a strategy of procuring raw materials or parts and components from suppliers or having any value chain activities performed by outsiders. A firm adopting an outsourcing strategy relies on outside vendors to supply products, support services, or functional activities. A firm may outsource production, assembling, marketing, delivery, accounting and finance, warehousing,…
Growth Strategy: Meaning, Pathways, Tips, Examples
Growth is one of the most discussed and lauded strategic options. It is equated with managerial success and achievement. An organization may grow by expansion (when it concentrates within a broad allied product market scope). Technology plays an essential underlying role in growth in today’s context. It enables companies to design, develop, and manufacture better…
Stability Strategy: Definition, Adopting, Pathways to Stability Strategy
Under the Stability strategy, a company where stops the expenditure on expansion, do not introduce new products or venture into new markets rather decides to focus of the current portfolio and market share.
Harvest Strategy
What Is Harvest Strategy? When future growth appears doubtful or not cost-effective, companies want to harvest as much as they can from the product. It limits additional investment and expenses and maximizes short-term profit and cash flow. When a company adopts a harvest strategy, it deliberately sacrifices its market position ‘in return for near-term cash…
Offensive Strategy
An offensive strategy consists of a company’s actions directed against the market leaders to secure competitive advantage. Competitive advantage may be achieved as a cost advantage or differentiation advantage or resource advantage. An offensive strategy must be creative so that competitors cannot easily thwart it. Offensive strategies include a dramatic reduction of price, a highly…
Defensive Strategy
A defensive strategy consists of a company’s actions directed for protecting its competitive advantage. A company pursues defensive strategies to protect competitive advantage through protecting existing market share. However, they can hardly create any competitive advantage. But they fortify the competitive position of the company. They also protect the resources and capabilities of the company….
First Mover Strategy: Definition, Advantages, Disadvantages
What is the First Mover Strategy? The first-mover arid late-mover strategies are related to the timing of strategic moves by an organization. Determination of the timing of strategic moves is important for every business organization. A firm may be the first mover in launching a strategy to gain a competitive advantage in the marketplace. Or,…
Late Mover Strategy
A firm can be said to have followed a late-mover strategy when it adopts a strategy of introducing a new product or entering a new market after the competitors have already done it. Being the late-mover means the firm is not interested in taking a strategic move first. The firm waits to see what happens…
General Electric Approach
General Electric introduced a comprehensive portfolio planning tool called a strategic business-planning grid. Like the BCG approach, it uses a matrix with two dimensions – one representing industry attractiveness (the vertical axis) and the other one representing company strength in the industry (the horizontal axis). The best businesses are those located in highly attractive industries…
Cut Back Strategies
Cut back strategies are those where the organization curtails or, in extreme cases, divests nonperforming assets, products, divisions. businesses, functions.