TYPES OF STRATEGIES

 Corporate Strategy
 Sets long-term direction for the total enterprise
 Business Strategy
 Identifies how a strategic business unit or division
will compete in its product or service domain
 Functional Strategy
 Guides activities within one specific area of
operations
Strategies
 Strategic Alternatives
GROWTH STABILITY RETRENCHMENT STRATEGIC ALLIANCES
INTENSIFICATI
ON
Market
Penetration

Market
Incremental
Development Growth Profit Divestment Joint Ventures

Product
Development Sustainable Liquidation Takeovers
growth
Innovation

DIVERSIFICATION
Bankruptcy Consortia
• HORIZONTAL
• Concentric Pause strategy
• Conglomerate
Turnaround Merger
• VERTICAL
• Forward
• Backward
 Global Strategies
 Globalization Strategy
 Adopts standardized
products and advertising
for use worldwide
 Multidomestic Strategy
 Customizes advertising
and products to best fit
local needs
 Transnational Strategy
 Seeks efficiencies of
global operations with
attention to local markets
E-Business Strategies
 E-Business Strategies
 Focus on Using the Internet for Business
Transactions
 B2B Business Strategies
 use IT and Web portals to vertically link
organizations with members of their supply chains.
 B2C Business Strategies
 use IT and Web portals to vertically link
organizations with members of their customers.
 Porter’s Generic Competitive Strategies
 Differentiation Strategy
 Offers products and services that are uniquely different
from the competition
 Focused Differentiation Strategy
 offers a unique product to a special market segment.
 Cost Leadership Strategy
 Seeks to operate at lower costs than competitors
 Focused Cost Leadership Strategy
 uses cost leadership and target needs of a special market.
 RIL plans to acquire Canadian co for $2bn
 MUMBAI: Two months after it made an offer to acquire a controlling stake in
the bankrupt Lyondell Basell, Indian energy major Reliance Industries is now
said to be eyeing privately-held Canadian firm, Value Creations.
According to media reports, RIL has submitted an expression of interest of $2
billion for Value Creations.
‘‘RIL is reviewing a number of global opportunities for growth in its core
business. The difficult operating environment of the past year has made
available several interesting opportunities, where an investment by a strategic
operator of industrial assets can add substantial value,'' an RIL spokesperson
told TOI.
Alberta-based Value Creations is a private company established in 1998, and
deals in oil sands resources. It is part of the Value Creation Group of
Companies, which is focused on transforming the oil sands industry by applying
its proprietary technology to resource development and to bitumen upgrading.
The company's promoters, according to agency reports, are looking to raise
funds to settle its dues with lenders.
 NTPC issue manages to get subscribed 1.2 times
 NEW DELHI: The public offer of the government-run power major NTPC, the first mega public
offer of 2010, managed to scrape through today with the issue getting subscribed 1.2 times.
The issue, through which the government is divesting 5% of its stake, at a floor price of Rs
201 a share, opened on February 3 and closed today. At the floor price, the follow-on-public
offer (FPO) is valued at Rs 8,286 crore.
By the second day, the issue could manage only 80 per cent subscription -- 77% on the
opening day and just 3% on the second day yesterday. Going by the poor response till
yesterday, analysts were warning that the issue could even be under-subscribed.
According to the latest data available with the National Stock Exchange, the FPO received bids
for 49.36 crore shares as against 41.22 crore shares on offer. At the given floor price, the
subscription generated the demand worth Rs 9,922.56 crore.
However, NTPC chairman and managing director RS Sharma told reporters here that the offer
was well received.
 Wipro seeks 50 acres near Bangalore
airport for IT park
 BANGALORE: Global software major Wipro has
applied for 50 acres of land near the Bangalore
international airport for setting up an IT park, an
official said on Friday.
"Wipro has applied for 50 acres of land in the
new industrial belt coming up near the new
airport. The state high-level committee will
consider it soon," state principal industry
secretary V.P. Baligar told reporters here.
 Toyota sees doubling of sales powered by Etios in
India
 MUMBAI: Toyota Kirloskar Motors, the Indian unit of Toyota Motor Corp expects
to double its sales in the next five to seven years, powered by its
 Etios cars to be launched at the end of this year, a top company official told
Reuters on Saturday.
Etios is a compact car, developed by Toyota specifically for the Indian market,
and showcased at the Delhi Auto Expo last month.
In 2010, the company expects its sales to grow more than 15 percent from 2009,
when it had sold 55,497 cars.
"For us to become a significant player in the volume market segment, we need at
least 10 percent market share and we expect to achieve that in the next five to
seven years," managing director Hiroshi Nakagawa said in an interview.
Toyota has a 3 percent share of the local automobile market, and sells brands
like Innova, Fortuna, Sedan's CorollaAltis and Camry.
 Jindal Saw plans Rs 10,000 cr diversification

 29 Sep 2008, 0000 hrs IST, Indresh Batra, managing director of Jindal
SAW, part of the $10 billion OP Jindal group, talks about the company's
recent mega diversification programme.
For diversification, the areas the company has selected are
coastal and river shipping, sectors many fear to tread. What are
the opportunities you found there?
India's contiguous coastline and river network is one of the largest in the
world, yet fewer than 500 vessels operate here. Increasing energy costs
underscore the cost advantages of waterborne transport compared to
other modes.
 Air India, Indian Airlines merger to stay:
Govt
 27 Jan 2010, NEW DELHI: The government Wednesday rubbished reports of de-merger of Air
India and said its merger with Indian Airlines was well-planned and decided collectively by
various agencies.
"The merger was a carefully thought-out process and a collective decision of all agencies of
the government. We have no move afoot for the Air India-Indian Airlines demerger," the
ministry of civil aviation said in a statement.
In 2007, Indian Airlines Ltd, the state-owned carrier that flew largely within the country and
Air India, which flew international routes, were merged into one company, the National
Aviation Co of India Ltd (Nacil) which now operates under a single brand Air India.
To prove that Air India was on a growth path, the carrier has further informed that its higher
passenger carriage and improved load factor during October-December 2009 has contributed
to reduction in its losses by 25 per cent from Rs 1,152.44 crore in October-December 2008 to
Rs 864.33 crore in October-December 2009.
 US jet company Eclipse files for
liquidation
25 Feb 2009, NEW MEXICO: Struggling jet maker Eclipse Aviation has
sustained another setback as senior stakeholders filed a motion in federal
court to convert the company's bankruptcy status to liquidation proceedings.
Eclipse spokesman Keith Spondike confirmed Tuesday's filing but cautioned
the effort remains subject to a judge's approval.
The company's new request to proceed under Chapter 7 of the U.S.
bankruptcy code would allow it to operate under the direction of a court
trustee until the matter is resolved. If Eclipse can settle with creditors, it
might not have to be liquidated.
Eclipse had sought bankruptcy protection from creditors in November.
Retrenchment strategy
 Retrenchment strategy is a corporate level
defensive strategy followed by a firm when its
performance is disappointing or when its
survival is at stake for a variety of reasons
 Economic recessions, production inefficiencies
and innovative breakthroughs by competitors
are only three causes
 Divestment strategy (spin-off or
Divestiture)
 It involves the sale of those units or parts of
a business that no longer contribute to or fit
the firm’s distinctive competence
1. Outright sale
2. Liveraged buy-out (LBO)
3. Spin-off
 Reasons for Divestment
1. Strong focus
2. Unlock critical funds
3. Invest in emerging technologies
4. A maker of policies
5. From red to black
6. Unviable projects
 Turnaround strategies
 A turnaround is designed to reverse a negative
trend and bring the organisation back to normal
health and profitability
 The basic purpose of a turnaround is to transform
the corporation into a leaner and more efficient
firm
 It usually involves getting rid of unprofitable
products, trimming the workforce, pruning
distribution outlets and finding other useful ways of
making the organisation more efficient.
 Conditions for turnaround
1. Continuous cash flow problems
2. Declining profits
3. Dwindling market share
4. High employee turnover
5. Low moral of employees
6. Underutilisation of capacity
7. Raw material supply problem
8. Rising input prices
9. Strike and lockouts
10. Increased competition
11. Recession
12. Mismanagement etc
 Actions planned for turnaround
1. Change leader
2. Change the prices
3. Focus attention on specific customer and specific products
4. Extend the product’s life through product improvements
5. Replace existing products with new ones
6. Rationalise the product lines
7. Liquidating the assets for generating cash
8. Better internal coordination
9. Emphasis on selling, advertising etc
 Liquidation
 This is a strategy to be followed as last resort,
when neither a turnaround nor a devestment
seems feasible, liquidation is used
1. Future is bleak
2. Unmanageble accumulated losses
3. Somebody willing to buy
4. Not possible to revive
 Ways:
1. Compulsory liquidation
2. Voluntary winding up
3. Voluntary under supervision
 Bankruptcy
 It is means wherby an organisation that is
unable to pay its debt can seek court
protection ferm creditors and from certain
contract obligations while it tries to regain
financial health and stability.
 Reorganisation bankruptcy
 US jet company Eclipse files for
liquidation
25 Feb 2009, NEW MEXICO: Struggling jet maker Eclipse Aviation has sustained
another setback as senior stakeholders filed a motion in federal court to convert
the company's bankruptcy status to liquidation proceedings.
Eclipse spokesman Keith Spondike confirmed Tuesday's filing but cautioned the
effort remains subject to a judge's approval.
The company's new request to proceed under Chapter 7 of the U.S. bankruptcy
code would allow it to operate under the direction of a court trustee until the
matter is resolved. If Eclipse can settle with creditors, it might not have to be
liquidated.
Eclipse had sought bankruptcy protection from creditors in November.
 Combination strategies
 It is a mixture of expansion, stability or retrenchment
strategies applied simultaneously or sequentially
 Depending on survival demands an organisation can
employ various strategies to survive, grow and
remain profitable.
1. Acquisitions, takeovers, mergers
2. Joint ventures
3. Strategic alliances
4. Consortia
 Divestment strategy (spin-off or
Divestiture)
 It involves the sale of those units or parts of
a business that no longer contribute to or fit
the firm’s distinctive competence
1. Outright sale
2. Liveraged buy-out (LBO)
3. Spin-off
 Reasons for Divestment
1. Strong focus
2. Unlock critical funds
3. Invest in emerging technologies
4. A maker of policies
5. From red to black
6. Unviable projects
 Turnaround strategies
 A turnaround is designed to reverse a negative
trend and bring the organisation back to normal
health and profitability
 The basic purpose of a turnaround is to transform
the corporation into a leaner and more efficient
firm
 It usually involves getting rid of unprofitable
products, trimming the workforce, pruning
distribution outlets and finding other useful ways of
making the organisation more efficient.
 Conditions for turnaround
1. Continuous cash flow problems
2. Declining profits
3. Dwindling market share
4. High employee turnover
5. Low moral of employees
6. Underutilisation of capacity
7. Raw material supply problem
8. Rising input prices
9. Strike and lockouts
10. Increased competition
11. Recession
12. Mismanagement etc
 Actions planned for turnaround
1. Change leader
2. Change the prices
3. Focus attention on specific customer and specific products
4. Extend the product’s life through product improvements
5. Replace existing products with new ones
6. Rationalise the product lines
7. Liquidating the assets for generating cash
8. Better internal coordination
9. Emphasis on selling, advertising etc
 Liquidation
 This is a strategy to be followed as last resort,
when neither a turnaround nor a devestment
seems feasible, liquidation is used
1. Future is bleak
2. Unmanageble accumulated losses
3. Somebody willing to buy
4. Not possible to revive
 Ways:
1. Compulsory liquidation
2. Voluntary winding up
3. Voluntary under supervision
 Bankruptcy
 It is means wherby an organisation that is
unable to pay its debt can seek court
protection ferm creditors and from certain
contract obligations while it tries to regain
financial health and stability.
 Reorganisation bankruptcy
 US jet company Eclipse files for
liquidation
25 Feb 2009, NEW MEXICO: Struggling jet maker Eclipse Aviation has sustained
another setback as senior stakeholders filed a motion in federal court to convert
the company's bankruptcy status to liquidation proceedings.
Eclipse spokesman Keith Spondike confirmed Tuesday's filing but cautioned the
effort remains subject to a judge's approval.
The company's new request to proceed under Chapter 7 of the U.S. bankruptcy
code would allow it to operate under the direction of a court trustee until the
matter is resolved. If Eclipse can settle with creditors, it might not have to be
liquidated.
Eclipse had sought bankruptcy protection from creditors in November.
 Combination strategies
 It is a mixture of expansion, stability or retrenchment
strategies applied simultaneously or sequentially
 Depending on survival demands an organisation can
employ various strategies to survive, grow and
remain profitable.
1. Acquisitions, takeovers, mergers
2. Joint ventures
3. Strategic alliances
4. Consortia
 Module 4 STRATEGY IMPLEMENTATION
10 hrs
1. Inter-relationship between formulation and implementation;
2. Issues in strategy implementation,
3. Resource Allocation, Budgets,
4. Organization structure,
5. Matching and strategy,
6. Behavioural Issues — Leadership styles,
7. Corporate culture and values power,
8. Social Responsibilities — Ethics,
9. Building capable organization;
10. Functional Issues — Financial, Marketing, Operations and
Personnel Plans and Policies
 Porter’s Competitive Strategies
 Differentiation Strategy
 Offers products and services that are uniquely different
from the competition
 Focused Differentiation Strategy
 offers a unique product to a special market segment.
 Cost Leadership Strategy
 Seeks to operate at lower costs than competitors
 Focused Cost Leadership Strategy
 uses cost leadership and target needs of a special market.