1. Strategy in action- Corporate Strategy Business Strategy
Chapter 5
Strategy in action-
Corporate Strategy
Business Strategy
Functional Strategy

2. Chapter objectives
After finish this chapter student will understanding what is:
Corporate level strategy
Business level strategy
Functional level strategy
Tools to develop strategy

3. Level of strategic plan
Most of company develop strategy into 3 different level:
Corporate level strategy
Business level strategy
Functional level strategy

4. Functional Strategies (R&D, Manufacturing, marketing, finance,
Corporate
Strategies
Business Strategies
Functional Strategies
(R&D, Manufacturing,
marketing, finance,
human resource, …etc
Level of Strategic plan
Responsibility of corporate level
Responsibility of business level
Responsibility of head of functional department within business unit

5. Corporate level strategy
Sometime called grand strategy or master strategy.
Address overall of the organization strategic direction.
For the organization which has a various strategic business unit, it may set the direction to each business unit differently (SBU-strategic business unit)

6. Type of corporate level strategies
Growth strategy
Concentration
Market Penetration
Market Development
Product Development
Diversification
Concentric diversification
Conglomerate diversification
Integration
Horizontal Integration
Vertical Integration
Stability strategy
Retrenchment strategy
Harvest
Turnaround
Divestiture
Bankruptcy
Liquidation

7. Growth strategy
Involves organizational expansion in sales, earnings, and other criteria such as business units, product variety, customers, and geographic location. There are 3 type:
Concentration
Diversification
Integration

8. Concentration strategy
or intensive strategy, focus on effecting the growth of a single product or service or small number of closely related products or services.
Current Products
New Products
Market Penetration
Product Development
Market development
(Diversification)
Current Markets
New Markets

9. Diversification strategy
entails effecting growth through the development of new areas that are clearly distinct from current business.
Concentric diversification- firm seek new products that have technological or market synergies with existing product line.
Conglomerate diversification-firm seek new businesses that have no relationship to its current technology, products, or markets.

10. Integration strategy
involves expanding its operations line to related activities or the similar activities but to acquire more markets or products.

11. Horizontal and Vertical strategy
Suppliers
Background Integration
Competitors
Organizations
Competitors
Horizontal Integration
Forward Integration
Buyers

12. Stability strategy
engages maintaining the statue in competition because of several reasons:
If company doing well –not take risk from growing
Difficult to growth according to resources stretched –no need to growth
Market growth is slow– stay in the current market share.

13. Retrenchment Strategy
or defensive strategy focus on the desire or need to reduce organizational operation, usually through cost reduction or asset reductions. There are five sub strategy.
Harvest
Turnaround
Divestiture
Bankruptcy
Liquidation

14. Tools for developing corporate strategy
1- BCG Growth Matrix
2- GE 9 Cell

15. 1- BCG Growth Matrix

16. 2- GE 9 Cell

17. Business level strategy
involves a distinctive positioning that firm established to competes successfully in a particular market.

18. Porter’s generic strategies

19. cost advantage strategy a firm tries to become the lower cost producer in the industry. However, its product must be seen as comparable to products of the quality and other expectations of the buyers.
In differentiation strategy, a firm tries to produce something that is unique with respect to certain dimensions that are widely valued by buyers. The firm may position itself to cater to some or all of those dimensions. For providing these valued attributes the firm will charge a premium.

20. segmentation strategy
or called focus strategy concentrates on a narrow segment and within that segment attempts to achieve either cost leadership or differentiate.
Focus strategy are most effective when consumers have distinctive preferences or requirements and when rival firms are not attempting to specialize in the same target segment.

21. Functional Level strategy
Involves business function operations to support business and corporate strategy. It focus on operation plan within marketing, productions, finance, human resource and...division.

22. Means for achieving strategy
Joint Venture/Partnering
Joint Venture is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.
Cooperative arrangements include R&D partnerships, cross-distribution arrangement, cross-licensing arrangement, cross-manufacturing agreement, and joint-bidding consortia.

23. Merger/Acquisition
This is two commonly used ways to pursue strategies. Merger occur when two organizations of about equal size unite to form one enterprise.
An acquisition occur when a large organization purchases (acquires) a smaller firm, or vice versa.

24. Review and discussion
Describe briefly type of strategy that you just already learned.
Group Discussion
-break a class into group (3-5)
Topics: Suppose you are a manager of tourism company.
-If your company is a global firm (big) what type of business strategy you will use to compete in the market? why? how to do it?
-If your company is a local firm (small) what type of business strategy you will use to compete in the market? why? how to do it?