LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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Grand Strategy Matrix
Strategies in Action
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i. Managing by extrapolation ii. Managing by crisis iii. Managing by subjective iv. Managing by hope
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i. Managing by extrapolation ii. Managing by crisis iii. Managing by subjective iv. Managing by hope
Gaining ownership or control over distributors and retailers.
Seeking ownership or increasing control of the firm’s suppliers.
Seeking ownership or increasing control of the firm’s competitors.
Seeking increased market share for present products or services in present markets through greater marketing efforts.
Introducing existing products or services into new geographic area.
Seeking increased sales by improving present products or services or developing ones.
Adding new but related products or services.
Adding new or unrelated products or services.
Adding new or unrelated products or services for present customers.
Regrouping through cost and asset reduction to reverse declining sales and profit.
Selling a division or part of an organization.
Selling all of a company’s assets, in parts, for their tangible worth.
i. Price sensitive customers ii. Limited product differentiation iii. No brand loyalty iv. Buyers have significant bargaining power
i. Higher price for brand loyalty ii. Added or special features
There is a caveat on differentiation. The product differentiation may not be good enough to justify increase in price, i.e. the brand loyalty may not succeed. Another weakness of differentiation is that it may be copied by competitor. Although this strategy may work, but the effect is not long lasting. In order for product differentiation to work, the company must have interdepartmental coordination, i.e. R&D and marketing departments must work closely together.
This strategy advocates specialization. Success depends on following factors: o Market size o Growth potential o Specialization based on following segments: a. Customers b. Geography c. Product line
i. A merger occurs when two firms of equal size merge into one and form one operating enterprise.
ii. An acquisition occurs when a larger firm takes over a smaller firm, either by outright purchase (take-over) or through stock control (hostile take-over).
iii. There are many reasons for merger. These reasons include: o Improve capacity utilization o Better use of existing sales force o Reduce managerial staff o Gain economies of scale o Smooth put seasonal trends of sales o Gain access to new supplier, distributors, customers, products, and creditors o Gain new technology o Reduce tax obligation
There is an advantage for firm to be the first to produce the new product or being the first to enter the market. When you are the first to penetrate the market, you can carve out the market share for yourself and it is difficult for rivals to compete against you, i.e. it is costly for competitors to reinvent the wheel.
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