Chapter 6
Strategies in Action
Strategic Management:
Concepts & Cases
13th Edition
Fred David
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Long Term Objectives
Quantitative Challenging
Measurable Hierarchical
Realistic Obtainable
Understandable Congruent
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The Balanced Scorecard
Robert Kaplan & David Norton –
Strategy evaluation & control technique
Balance financial measures with
nonfinancial measures
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Balance Scorecard
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Levels of Strategies –
Large Company
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Levels of Strategies –
Small Company
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Types of Strategies
Forward
Integration
Vertical Backward
Integration Integration
Strategies
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Vertical Integration Strategies
Forward Gaining ownership or increased
Integration control over distributors or retailers
Backward Seeking ownership or increased
Integration control of a firm’s suppliers
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Types of Strategies
Market
Penetration
Intensive Market
Strategies Development
Product
Development
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Intensive Strategies
Seeking increased market share for
Market present products or services in
Penetration present markets through greater
marketing efforts
Market Introducing present products or
Development services into new geographic areas
strategies implemented to
Product
increase sales by improving or
Development modifying existing products
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Types of Strategies
Related
Diversification
Diversification
Strategies
Unrelated
Diversification
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Diversification Strategies
Related Adding new but related products or
Diversification services
Unrelated
Adding new, unrelated products or
Diversification services
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Types of Strategies
Retrenchment
Defensive Divestiture
Strategies
Liquidation
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Defensive Strategies
Regrouping through cost and asset
Retrenchment reduction to reverse declining sales
and profit
Divestiture Selling a division or part of an
organization
Selling all of a company’s assets, in
Liquidation parts, for their tangible worth
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Porter’s Five Generic Strategies
Type 1 Cost Leadership – Low cost
Type 2 Cost Leadership – Best value
Type 3 Differentiation
Type 4 Focus – Low cost
Type 5 Focus – Best value
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