Corporate Level Strategies
Corporate Level Strategies
Kinds of Grand Strategies: * Stability Strategies * Growth Strategies * Retrenchment Strategies * Combination Strategies
Stability Strategies
The basic approach is ‘maintain present course: steady as it goes.’
In an effective stability strategy, companies will concentrate their resources where the company presently has or can rapidly develop a meaningful competitive advantage in the narrowest possible product-market scope consistent with the firm’s resources and market requirement's
Types of 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.
For example:
Kinds of Grand Strategies: * Stability Strategies * Growth Strategies * Retrenchment Strategies * Combination Strategies
Stability Strategies
The basic approach is ‘maintain present course: steady as it goes.’
In an effective stability strategy, companies will concentrate their resources where the company presently has or can rapidly develop a meaningful competitive advantage in the narrowest possible product-market scope consistent with the firm’s resources and market requirement's
Types of 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.
For example: