MODULE –III
THE STRATEGIC
ALTERNATIVES
CORPORATE LEVEL STRATEGY
This level of strategy focuses on the overall
direction and scope of the entire organization. It
involves decisions about which markets to enter or
exit, how to allocate resources among different
business units, and how to create synergies across
the organization’s portfolio of businesses.
TYPES OF CORPORATE LEVEL STRATEGY
Growth Strategies / Expansion Strategies
Stability Strategies
Retrenchment Strategies
Combination Strategy
STABILITY STRATEGIES
Many businesses that are happy with their present
market position and are doing well under their
current business model typically favour the
stability strategy. They continue to operate in the
same market and offer the same goods and
services, but they might use research and
development to improve their current offerings.
The business could aim to attract
TYPES OF STABILITY STRATEGIES
NO CHANGE
PROFIT
INVESTIGATION
EXPANSION STRATEGIES
For businesses looking to develop new
goods or services, connect with new
markets, attract new customers and
increase their staff, an expansion or
growth strategy is the best option. It
is appropriate for a business with a
solid foundation in one market and
aspirations for expansion into other
markets
TYPES OF EXPANSION STRATEGIES
CONCENTRATION
DIVERSIFICATION
INTEGRATION
CO-OPERATION
INTERNATIONALISATION
RETRENCHEMENT STRATEGY
An organisation may occasionally take a step
back from its existing performance or
position to avoid bankruptcy. This might
happen in times of economic downturn, or if
the original business plan did not yield the
expected outcomes. Retrenchment helps to
preserve the company's cash flow and allows
it to continue operating through difficult
times. Businesses using a retrenchment plan
could consider changing their business model
and reducing the range of their operations.
TYPES OF RETRENCHMENT STRATEGIES
TURNAROUND
DIVESTMENT
LIQUADATION
BUSINESS LEVEL STRATEGIES
CORPORATE STRATEGY – VERTICAL &
HORIZONTAL INTEGRATION
HORIZONTAL INTEGRATION
STRATEGIC ALLIANCE
DIVERSIFICATION
Diversification involves expanding a
company's operations into new markets or
products. It can be related (concentric) or
unrelated (conglomerate) diversification
BUILDING & RESTRUCTURING
CORPORATION
This involves reorganizing the
company's structure, processes, or
portfolio to improve its performance.
Restructuring might be necessary
when a company faces challenges
such as market decline, financial
instability, or the need to adapt to
new strategic directions.
STRATEGIC ANALYSIS & STRATEGIC CHOICE
Strategic Analysis involves evaluating the
internal and external environments to
understand the organization's strengths,
weaknesses, opportunities, and threats
(SWOT).
Strategic Choice refers to the decision-
making process regarding the selection of a
strategic direction after analyzing available
options. It may involve corporate, business,
and functional-level strategies.
ORGANIZATIONAL CAPABILITY PROFILE
This refers to the evaluation of a
company’s internal resources and
capabilities—such as human
resources, technology, processes,
and culture—that can be leveraged
to achieve strategic objectives.
STRATEGIC ADVANTAE PROFILE
This is an assessment of a
company’s competitive advantage,
analyzing the unique strengths or
resources that can be used to
outperform competitors.
CORPORATE PORTFOLIO ANALYSIS
This process involves assessing the
different businesses or products
within a corporation’s portfolio to
determine resource allocation,
investment priorities, and strategic
fit. Tools like the BCG Matrix and
GE 9 Cell Model are commonly
used.
GAP ANALYSIS
GAP Analysis identifies the gap
between the company's current
performance and its desired
performance or objectives. It
highlights areas where
improvements are needed, helping
guide strategic action.
McKinsey's 7S Framework
This model looks at seven internal elements that need
to be aligned for successful strategy implementation:
Strategy
Structure
Systems
Shared Values
Skills
Style
Staff
The framework helps organizations understand how
changes in one area may affect others and ensures
alignment across all levels.
GE9 CELL MATRIX
The GE 9 Cell Matrix evaluates a
company’s business units based on
their market attractiveness and
competitive strength. It categorizes
business units into nine cells, helping
determine whether to invest, grow,
or divest in specific areas.
BCG Matrix (Boston Consulting Group Matrix)
The BCG Matrix helps a company
analyze its product or business portfolio
based on two dimensions: market growth
rate and relative market share. It classifies
products into four categories:
Stars: High growth, high share.
Cash Cows: Low growth, high share.
Question Marks: High growth, low share.
Dogs: Low growth, low share.
This helps determine resource allocation.
BALANCE SCORE CARD
The Balanced Scorecard is a strategic
management tool that measures
performance from four perspectives:
Financial: Profitability, revenue growth.
Customer: Customer satisfaction, loyalty.
Internal Processes: Efficiency, quality.
Learning and Growth: Employee
development, innovation.
It provides a balanced view of
performance beyond just financial metrics.
INTERNAL FACTORE EVALUATION MATRIX
The IFE Matrix is a tool used to
evaluate the internal strengths and
weaknesses of an organization. It
involves identifying key internal
factors, assigning them weights
based on importance, and rating the
company's performance in each area.
This helps assess the company’s
current strategic position.