Growth Strategy
UNIT 9
Objectives
GROWTH STRATEGIES-I
Growth Strategies-I
The objectives of this unit are to: l l l
acquaint you with the concept of corporate strategy; familiarize you with the various generic corporate strategies; explain the nature, scope and approaches to implementation of stability and growth strategies; and finally discuss the rationale for adopting these strategies.
l
Structure
9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 Introduction Nature and Scope of Corporate Strategies Nature of Stability Strategy Expansion Strategies Expansion through Intensification Expansion through Integration International Expansion Summary Key Words Self-Assessment Questions References and Further Readings
9.1
INTRODUCTION
Strategic management deals with the issues, concepts, theories approaches and action choices related to an organization’s interaction with the external environment. Strategy, in general, refers to how a given objective will be achieved. Strategy, therefore, is mainly concerned with the relationships between ends and means, that is, between the results we seek and the resources at our disposal. For the most part, strategy is concerned with deploying the resources at your disposal whereas tactics is concerned with employing them. Together, strategy and tactics bridge the gap between ends and means. Some organizations are groups of different business and functional units, each of them must be having its own set of goals, which may not necessarily be same as the goals of the corporate headquarters looking after the interests of the entire organization. Since the goals are different and the means to achieve them are different, strategies are likely to be different. This understanding has led to the hierarchical division of strategy at two levels: a business-level (competitive) strategy and a company-wide strategy (corporate strategy) (Porter, 1987). In addition to these strategies, many authors also mention functional strategies,
Objectives
GROWTH STRATEGIES-I
Growth Strategies-I
The objectives of this unit are to: l l l
acquaint you with the concept of corporate strategy; familiarize you with the various generic corporate strategies; explain the nature, scope and approaches to implementation of stability and growth strategies; and finally discuss the rationale for adopting these strategies.
l
Structure
9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 Introduction Nature and Scope of Corporate Strategies Nature of Stability Strategy Expansion Strategies Expansion through Intensification Expansion through Integration International Expansion Summary Key Words Self-Assessment Questions References and Further Readings
9.1
INTRODUCTION
Strategic management deals with the issues, concepts, theories approaches and action choices related to an organization’s interaction with the external environment. Strategy, in general, refers to how a given objective will be achieved. Strategy, therefore, is mainly concerned with the relationships between ends and means, that is, between the results we seek and the resources at our disposal. For the most part, strategy is concerned with deploying the resources at your disposal whereas tactics is concerned with employing them. Together, strategy and tactics bridge the gap between ends and means. Some organizations are groups of different business and functional units, each of them must be having its own set of goals, which may not necessarily be same as the goals of the corporate headquarters looking after the interests of the entire organization. Since the goals are different and the means to achieve them are different, strategies are likely to be different. This understanding has led to the hierarchical division of strategy at two levels: a business-level (competitive) strategy and a company-wide strategy (corporate strategy) (Porter, 1987). In addition to these strategies, many authors also mention functional strategies,