Strategic Alternatives – Development & Growth

Elements Strategic Alternatives:

Market Penetration– known skills and technology – just getting better

Market Development – known skills and technology – new products or segments

Product Development – known skills and technology – brand and continuous modification – R&D, production and SCM efficiency focus

Combination in limited growth often reality

Horizontal Integration, Related Diversification, Vertical Integration – SCM/Marketing Network – increasing power – focus on synergy

Unrelated Diversification – or Conglomerate – creating a portfolio – corporate strategy


Principle:

Summary of main strategic alternatives, grouped by growth


Issues:

DO NOTHING = copy competitors – NOTHING is downfall

SELL OFF also an option

Innovation needed to grow internally (limited effect) PLC dependent

  • Winning, retaining and developing customers

Strategic means (alliance/JV or M&A) needed with higher risk of corporate strategy change (substantive effect)

Unrelated diversification in subsidiaries

Inventing a new way of doing business – new business model


Applications:

To determine effect compared to planning gap


Source Strategic Alternatives:

Thompson and Martin (2010)