Strategy

Corporate strategies:

• It is 1 of 3 of the organization strategies: Functional, Competitive, and Corporate.

• Based on the mission and goals of the organization and the roles each business unit of the organization will play.

• It is an organizational strategy that determines what businesses a company is in or wants to be in and what it wants to do with those businesses.

• When an organization's problems are more serious, more drastic action

• Example: CIT group's declining profits prompted management to cut costs by $125 million and sell the company's aircraft financing unit to focus more on commercial leading and leasing.

​ Turnaround strategy:

• A short-term renewal strategy that is used for minor performance problems.

• Is used to help organizations stabilize operations, revitalize organizational resources and to compete.

Retrenchment strategy:

Renewal strategy: A corporate strategy designed to address declining performance
- There are two types of renewal strategy called the retrenchment strategy and Turnaround strategy.
- In both strategies managers cut costs and restructure organizational operations.

Stability strategy:

• It is a corporate strategy in which an organization continues to do what it is currently doing.

• Does not grow , but does not fall behind

Growth

• Helps the organization grow so that it does not lose its customers, so it has to evolve.

• This strategy has subcomponents called, vertical integration, horizontal integration, concentration, and diversification.

• An organization can grow by either related or unrelated diversification.

• Related diversification: happens when companies combine or merge with other companies in related industries

• Unrelated diversification: A company combines with another company that is not in the same or similar industry.

Diversification

• It is part of the growth strategy and is focused on one thing.

• Focuses on its primary line of business and increases the number of products offered or markets served in the primary business

Concentration

• Can choose to grow by vertical integration, backward, forwards, or both.

• Backward- The organization becomes its own supplier so it can control its outputs

• Forwards: The organization becomes its own distributor and is able to control its outputs

​Vertical integration

• A company grows by combining with competitors

​Horizontal integration

​Sources

• Management Robbins Coulter Textbook

• Class materials (notes, slides, pre-parties, past exams, etc.)