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Chapter 5

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21 views17 pages

Chapter 5

Uploaded by

231525070
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 5

Strategies in Action
 Dr. Bushra Usman

Ch
5-
1
Long Term Objectives
 Quantitative  Challenging

 Measurable  Hierarchical

 Realistic  Obtainable

 Understandable  Congruent
Financial vs. Strategic Objectives
Financial Objectives
Growth in revenues
Growth in earnings
Higher dividends
Larger profit margins
Greater ROI
Higher earnings per share
Rising stock price
Improved cash flow
The Balanced Scorecard

Robert Kaplan & David Norton –

Strategy evaluation & control technique


Balance financial measures with
nonfinancial measures
Balance shareholder objectives with
customer & operational objectives
Levels of Strategies –
Large Company
Levels of Strategies –
Small Company
Types of Strategies

Forward
Integration

Vertical Backward
Integration Integration
Strategies
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
Types of Strategies

Market
Penetration

Intensive Market
Strategies Development

Product
Development
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

Seeking increased sales by


Product
improving present products or
Development services or developing new ones
Types of Strategies

Related
Diversification

Diversification
Strategies

Unrelated
Diversification
Diversification Strategies

Related Adding new but related products or


Diversification services

Unrelated
Adding new, unrelated products or
Diversification services
Types of Strategies

Retrenchment

Defensive Divestiture
Strategies

Liquidation
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
Porter’s Five Generic Strategies
 https://www.youtube.com/watch?v=PeN1pvahsSA
 https://www.youtube.com/watch?v=i66HWNCwUTs
 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

 https://www.youtube.com/watch?v=Uuuxs9gO8C0

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