2.

Market Development

This strategy consists of marketing present products, often with only cosmetic modifications, to
customers in related market areas by adding channels of distribution or by changing the content of
advertising or promotion.

Market growth is a low-risk strategy compared to other, more encompassing, strategies. Instead of
investing in research and development to create new product offerings, the market-growth strategy
focuses on growing the market for a current product. An example of this is an electronics company that
develops markets for an existing stereo system instead of developing a new system. To develop new
markets it may be necessary to sell stereos in other markets as time passes, such as in foreign countries
that are less technologically developed.

Bench

An example of business that used market development strategy is Jollibee Foods Corporation. They
started a few years ago its series of advertisement that have different stories of friendship, family and
love. Through the change in the content of their commercials, many were touched, not only Filipinos but
also other nations around the world. Since these advertisements became viral through different social
platforms, many foreigners showed their reactions in Youtube and Facebook and mentioned their hope
to taste the food of Jollibee. It was also reported that Jollibee increased their expansion around the
globe and with also this, Jollibee Foods Corp. developed new market in foreign countries.

7. Conglomerate Diversification

In this strategy, a firm, particularly a very large one, plans acquire a business because it represents the
most promising investment opportunity available. The principal concern of the acquiring firm is the
profit pattern of the venture, rather than creating product-market synergy with existing businesses

Occasionally a firm, particularly a very large one, plans acquire a business because it represents the most
promising investment opportunity available. This grand strategy is commonly known as conglomerate
diversification.

The principal concern of the acquiring firm is the profit pattern of the venture

Unlike concentric diversification, conglomerate diversification gives little concern to creating product-
market synergy with existing businesses

Ayala – Zalora

Last year, Ayala Corporation, being known as one of the notable corporations here in Philippines,
acquired 49% of BF Jade E-Service Philippines stake. BF Jade was known to be the owner of Zalora here
in the Philippines. According to the Philippine Daily Inquirer, one of the representative of Ayala group
mentioned that the investment made to BF Jade will lead them to great opportunities because of the
increasing benefit and value of e-commerce businesses. Since e-commerce currently are growing in the
market, it was expected that this can bloom by $10 billion in year 2025 as stated by Export.Gov. It was
also mention by the Ayala Group that with the operations of Zalora currently, it will be profitable by
2019. Through this, Ayala Corporation used the conglomerate diversification as it was concerned on the
market and value of e-services in the future and on the pattern of the income of Zalora Philippines
before buying its stake.

8. Turnaround

This is a strategy used by a firm that is in trouble. Its managers believe that the firm can survive and
eventually recover if a concerted effort is made over a period of a few years to fortify its distinctive
competences. There are two basic forms 0f retrenchment: Cost Reduction and Asset Reduction

The turnaround strategy is used when a firm is experiencing profit stagnation, decline or other serious
problems. It is an attempt to change the firm's strategy in the hopes of reversing its fortunes. In order to
turn a firm around, managers will often change the direction of the firm. For example, a print newspaper
might make the switch to online publication in order to adapt to the changing market.

The firm finds itself with declining profits

Among the reasons are economic recessions, production inefficiencies, and innovative breakthroughs by
competitors

Strategic managers often believe the firm can survive and eventually recover if a concerted effort is
made over a period of a few years to fortify its distinctive competences. This is turnaround.

Two forms of retrenchment:

Cost reduction

Asset reduction

Elements:

 A turnaround situation represents absolute and relative-to-industry declining performance of a

sufficient magnitude to warrant explicit turnaround actions

 The immediacy of the resulting threat to company survival is known as situation severity

 Turnaround responses among successful firms typically include two stages of strategic activities:
retrenchment and the recovery response

 The primary causes of the turnaround situation have been associated with the second phase of
the turnaround process, the recovery response

Philpost

Philippine Postal Corporation, also known as Philpost, reported the declining percentage of regular mails
way back 2014 because of the fast growing technology that greatly affects them. According to Philpost
representative, this made them to invest more in financial services and logistics and lowering their rates
to P50 for a 500 gram mail. In order to catch up the fast pacing technology, Philpost also made a new
portal for fast delivery and provided new services like Track and Trace which allows their customer to
track the status of their mails. They also provided an electronic proof of delivery in their delivery
services. With this cost reduction and asset development, Philpost uses turnaround strategy in order to
survive in the market.

9. Divestiture

This strategy involves the sale of a firm or a major component of a firm.

A divestiture strategy involves the sale of a firm or a major component of a firm

When retrenchment fails to accomplish the desired turnaround, or when a nonintegrated business
activity achieves an unusually high market value, strategic managers often decide to sell the firm

Reasons for divestiture vary

In 2017, Universal Robina Corp. and ConAgra Food sold the rights and privilege to manufacture Hunt’s
products to Century Pacific Food’s Corp with 50-50 venture. It was reported that the one of the reasons
of the selling plan is the objective of URC to focus on food snacks and beverages products. CPFC
welcomed the product with a view that it will be a source of growth and opportunities to them as they
will be also the distributor in the Philippines. According to their CPFC representative, they can add value
and increase brand level in the following years. This spin off of Hunts is UFC and ConAgra’s divestiture
strategy.

12. Strategic Alliances

Strategic alliances are distinguished from joint ventures because the companies involved do not take an
equity position in one another

In some instances, strategic alliances are synonymous with licensing agreements

Outsourcing arrangements vary

One example of strategic alliance happened, way back 2016, here in the Philippines is between ABS-CBN
Corporation and Western Union. A 3-month contract on promotion was signed by both parties which
makes Western Union clients have access to different programs of the network. According to the
representative of the money remittance firm, this can attract new set of customers around the globe to
use Western Union in sending money here in the Philippines. This strategic alliance will also give more
consumers updates in the Philippines’ news and shows. Even though there is no acquisition happened
and a short amount of time on agreement, both parties considered this strategy as a large transaction.