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Corporate Strategy
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Objectives
• Understand the concept of Corporate Strategy.
• Learn the different types of Corporate Strategies.
• Understand the concept of Directional Strategy.
• Learn the different types of Growth Strategies and why companies select
each one of them.
• Understand the internal and external means of how companies can achieve
Growth Strategies.
• Learn the different types of international entry options and why companies
select each one of them.
Objectives
• Learn the different types of Stability and Retrenchment Strategies and why
companies select each one of them.
• Analyze examples of different companies and learn how to identify what
type of strategy are they using.
Corporate Strategy
Corporate Strategy
Corporate Strategy
Corporate Strategy:
Describes a company's overall direction in terms of its general attitude
toward growth and the management of its various businesses and
product lines.
Corporate Strategy
Corporate Strategy deals with three key issues facing the corporation as a
whole:
2. The industries or markets in which the firm competes through its products
and business units: Portfolio Strategy.
• Vertical Growth.
• Horizontal Growth.
Vertical Growth
The company grows by making its own supplies and / or by distributing its own
products.
That may be a very appropriate corporate strategy when a firm has a strong
competitive position but industry attractiveness is low.
The firm attempts to secure strategic fit in a new industry where the firm´s
product knowledge, its manufacturing capabilities, and the marketing skills it
used are so effectively in the original industry that can be put to good use.
Is a merger between:
• LAN, Chile.
• TAM, Brasil.
Mergers
Is a merger between:
• Glaxo Wellcome.
• SmithKline Beecham.
South Korea
Mergers
Youku Tudou is a
merger between two
biggest video sites in
China.
Acquisitions
Acquisition: is the purchase of a company that is completely absorbed
as an operating subsidiary or division of the acquiring corporation.
Acquisitions usually occur between firms of different sizes and can be
either friendly or hostile.
Hostile acquisitions are often called takeovers.
Acquisitions
Acquisitions
Acquisitions
Walmart acquired
Yihaodian to
compete with
Alibaba online
store.
Strategic Alliances
Strategic Alliance: is a partnership of two or more corporations or
business units to achieve strategically significant objectives that are
mutually beneficial.
It is an effective way to grow by external means.
• Licensing.
Growth Strategies
International Entry Options
International Entry Options
In today´s world, growth usually has international implications.
Some of the more popular options for international entry are as follows:
Bintan Resorts
One study indicates the following results of success: vertical growth (80%),
horizontal growth (50%), concentric diversification (35%), conglomerate
diversification (28%).
Other study reveals that firms that grow through acquisitions do not perform
financially as well as firms that grow through internal means.
Directional Strategies
Stability Strategies
Stability Strategies
A corporation may choose Stability over Growth by continuing its current
activities without any significant change in direction.
• No Change Strategy.
• Profit strategy
Pause / Proceed with Caution Strategy
Pause / Proceed with Caution Strategy: is a timeout, an opportunity
to rest before continuing a growth or retrenchment strategy.
It is a very deliberate attempt to make only incremental improvements
until a particular environmental situation changes.
Presidential Elections
Niño Effect
No Change Strategy