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Strategy formulation: Corporate level strategies and Business level

strategies

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Text and ReferencesRef. 1: Azhar kazmi: Chap 6:

Corporate level strategies; Pages 165-216

Chap 7: Business level StrategiesRef. 2: Pearce & Robinson: Chap 2:

The strategic Management Process; Pages 50-70

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Ref 3: Thomson L. Wheelen & J. David Hunger (8th ed.): Concepts in Strategic Management and Business Policy: Chap 6: Strategy formulation: Corporate Strategy; Pages 136-63;

Chapter 7: Strategy formulation: Functional Strategy and Strategic choice; Pages 164-90.

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Corporate level Strategies deal with 3 main issues facing the corporation

as a whole

I .D ie ctio n a lS tra te g ies

II.P ortfo lioS tra te g ies

III .P a ren tingS tra te g ies

C o rpo ra tele ve l

S tra te g ies

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I. Corporate Directional Strategies

The firm’s overall orientation towards growth, stability, or retrenchment.

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1 . G ro w thS tra te g ies

2 . S ta b ilityS tra te g ies

3 . R e tre nch m e ntS tra te g ies

I.C o rpo ra teD ire c tio n a lS tra te g ies

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V e rtic a lG ro w th

H o riz o n ta lG ro w th

C o n ce n tra tion

C o n ce n tric(R e la te d)

C o n g lo m e ra te(U n re la te d )

D iv e rs if ic a tion

1 .G ro w thS tra te g ies

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P au se P ro cee d w ithC a ution

N o C h an ge P ro fit

2 . S ta b ilityS tra te g ies

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T u rnA rou nd

C a p tiveC o m p a ny

S e ll-o u t/D ive stm e nt

B a n k ru p tcy/L iq u id a tion

3 . Re tre nch m e n tS tra te g ies

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II. Corporate Portfolio analysis

Still used by 27% of Fortune 500 companies.Top management views its product lines and business units as a series of investments from which it expects a profitable returnThe product-lines/ Business units form a portfolio of investments that Top management must constantly juggle to ensure the best return on the corporation’s invested money. Two most popular approaches-BCG growth share matrix / GE business screen

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III. Corporate Parenting strategies

The manner in which the management coordinates activities, transfers resources, and cultivates capabilities among product lines and business units.

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Parenting fit matrix

Ballast

Heart land

Edge of heart land

Alien territory

Value trap

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Vertical axis: (top to bottom: Low to High): Misfit between critical success factors and parenting characteristicsHorizontal axis: (Left to right: Low to high): Fit between parenting opportunities and parenting characteristics.