Grand Strategy 1um72

The S.P.B. College of Business istration 2008-2009

Strategic Management Assignment On Grand Strategy Submitted To: Mr. Hormaz Patel Submitted By: Doshi Rushabh (14)

T.Y.BBA 6th sem. (A)

Grand Strategy Identification of various alternatives strategies is an important Aspects of strategic management as it provide the alternatives which can be considered and selected for implementation in order to arrive at certain result. At this stage, the managers are able to complete their environmental analysis and appraisal of their strengths and they are in a position to identify what alternatives strategies are available for them in the light of their organizational mission. In this there are four main strategies: 1) Stability Strategy 2)

Growth/Expansion Strategy

3)

Retrenchment Strategy

4) Combination Strategy

1) Stability Strategy: Basic approach in the stability strategy is ‘maintain present course: steady as it goes.’ In an effective stability strategy, companies will concentrate their resource where the company presently has or can rapidly develop a meaning full competitive advantage in the narrowest possible product market scope consistent with the firm’s resource and market requirements. Many companies in different industries have been forced to adopt stability strategy because of over capacity in the industries concerned. For Example: Steel Authority of India has adopted stability strategy because of over capacity in steel sector. Instead it has concentrated on increasing operational efficiency of its various plants rather than going for expansion. Others industries are ‘heavy commercial vehicle’, ‘coal industry’.

2) Growth/Expansion: Growth strategy is much talked in the present Indian environments, if we look at the corporate performance in the recent years. We find out that various organizations have grown both in of sales and profit as well as assets. Some organizations have grown so fast. For Example: Nirma ltd., Reliance Industry Ltd., infact, in the life of any organization, growth strategy is necessary at some point of time. James has identified those five stages emergence, growth maturity and decline. TISCO establish in 1907 is still the leader in steel sector. It suggests that the strategies fooled by organizations will determine the application of various stages. “A strategy is one that an enterprise pursue when it increase its level of objectives upwards in significant increment, much higher than an exploration of its past achievement level. The most frequent increase indicating a growth strategy is to raise the market share and or sales objectives upwards significantly.”

3) Retrenchment Strategy: A Retrenchment grand strategy is followed when an organization aims at a contraction of its activities through substantial reduction or the elimination of the scope of one or more its businesses, in of their respective customer groups, customer functions or alternatives technologies either singly or tly on order to improve its overall performance. Retrenchment involves a total or partial withdrawal from either a customer group or customer functions, or the use of an alternatives technology in one or more of firms businesses, as can be seen from the situation as given below: Types of Retrenchment Strategies:  Turnaround Strategy  Divestment Strategy  Liquidation Strategy For Example: A pharmaceutical firm pulls out from retail selling to concentrate on institutional selling in order to reduce the size of its sales force and increase marketing efficiency. A corporate hospital decides to focus only on specialty treatment and realize higher revenues by reducing its commitment to general cases which are typically less profitable to deal with.

4) Combination Strategy: Combination Strategies are a mixture of stability, expansion or retrenchment strategies applied either simultaneously (at the same time in different businesses) or sequentially (at different times in the same business). It would be difficult to find any organization that has survived and grown by adopting a single ‘pure’ strategy. The complexity of doing business demands that different strategies be adopted to suit the situational demands made upon the organization. For Example: The Tube Investments of India (TI), a Murugappa group company, has created strategic alliances in its three major businesses: tubes, cycles, and strips. In cycles, it has entered into regional outsourcing arrangements with the UP-based Avon (which we could term as co-competition, as Avon is TI’s competitor in the cycle industry) and Hamilton Cycles in the western region. In steel strips, TI has entered into a manufacturing contract with Steel Tubes of India, Steel Authority of India, and the Jindals.

Bibliography  Strategic Management by L.M. Prasad  http://www.idoub.com/doc/6788526/Strategies