MARKETING & STRATEGY
Types of Strategies
Forward
Integration
Vertical Backward
Integration Integration
Strategies
Horizontal
Integration
VERTICAL INTEGRATION
STRATEGIES
Gaining ownership or increased
Forward
control over distributors or
Integration retailers
Backward Seeking ownership or increased
Integration control of a firms suppliers
Horizontal Seeking ownership or increased
Integration control over competitors
ANSOFFS PRODUCT-MARKET
EXPANSION GRID
Existing PRODUCTS New
Existing INCREASING RISK
MARKET
PRODUCT
PENETRATION
DEVELOPMENT
INCREASING RISK
Sell more in existing
Sell new products in
Markets
existing markets
MARKETS
MARKET
EXTENSION DIVERSIFICATION
New Achieve higher Sell new products in new
sales/market share markets (related
of existing products diversification)
in new markets
Types of Strategies
Market
Penetration
Intensive Market
Strategies Development
Product
Development
INTENSIVE STRATEGIES
Seeking increased market share
Market for present products or services
Penetration in present markets through
greater marketing efforts
Introducing present products or
Market
services into new geographic
Development areas
Seeking increased sales by
Product improving present products or
Development services or developing new
ones
Types of Strategies
Related
Diversification
Diversification
Strategies
Unrelated
Diversification
DIVERSIFICATION STRATEGIES
Related Adding new but related
Diversification products or services
Unrelated
Adding new, unrelated products
Diversification or services
Types of Strategies
Retrenchment
Defensive Divestiture
Strategies
Liquidation
DEFENSIVE STRATEGIES
Regrouping through cost and
Retrenchment asset reduction to reverse
declining sales and profit
Divestiture Selling a division or part of an
organization
Selling all of a companys
Liquidation assets, in parts, for their
tangible worth
PORTERS GENERIC STRATEGIES
Overall Cost Leadership
Differentiation
Focus
TYPE 1 COST LEADERSHIP
STRATEGY CONDITIONS
Vigorous price competition
Plentiful supply of identical products
Little product differentiation
Products used in same ways
Low cost to switch
Large buyers with power
Industry newcomers use low prices to
attract buyers
TYPE 2 DIFFERENTIATION
STRATEGY CONDITIONS
Many ways to differentiate and buyers
perceive the differences as having value
Diverse buyer needs and uses
Few rival firms following similar
differentiation approach
Fast paced technological change and
evolving product features
TYPE 3 FOCUS STRATEGY
CONDITIONS
Large, profitable, and growing target
market niche
Industry leaders do not consider the niche
crucial to their success
Industry leaders consider it costly or
difficult to meet the needs of this niche
Industry has many niches and segments
Few rivals are specializing on this target
segment
MEANS FOR ACHIEVING
STRATEGIES
Cooperation among competitors
Joint venture / partnering
Merger / acquisition
First mover advantages
Outsourcing
STRATEGY ANALYSIS & CHOICE
COMPREHENSIVE STRATEGY-
FORMULATION FRAMEWORK
Stage 1 - Input Stage
EFE Matrix
IFE matrix
CPM
Stage 2 - Matching Stage
TOWS
SPACE matrix
BCG matrix
IE Matrix
Grand strategy matrix
Stage 3 - Decision Stage
QSPM
Stage 2: The Matching
Stage
TOWS Matrix
Strengths
Weaknesses
Opportunities
Threats
TOWS Matrix
Four Types of
Strategies
Strengths-Opportunities (SO)
Weaknesses-Opportunities (WO)
Strengths-Threats (ST)
Weaknesses-Threats (WT)
TWOS MATRIX
SO strategies use a firms internal
strengths to take advantage of external
opportunities
WO strategies improve internal weaknesses
by taking advantage of external
opportunities
ST strategies use a firms strengths to avoid
or reduce the impact of external threats
WT strategies defensive tactics aimed at
reducing internal weakness and avoiding
external threats
LIMITATIONS WITH TOWS
MATRIX
Does not show how to achieve a
competitive advantage
Provides a static assessment in time
May lead the firm to overemphasize a
single internal or external factor in
formulating strategies
Strategy-Formulation
Framework
SWOT Matrix
SPACE Matrix
Stage 2: BCG Matrix
The Matching Stage
IE Matrix
Grand Strategy Matrix
BCG Matrix
Boston Consulting Group Matrix
Assistsmultidivisional firm in
formulating strategies
Autonomous divisions = business
portfolio
Divisions may compete in different
industries
Focus on relative market-share
position & industry growth rate
BCG MATRIX
Question Marks low relative market
share in a high-growth industry
Stars high relative market share in a
high-growth industry
Cash Cows high relative market share
in a low-growth industry
Dogs Low relative market share in a
slow or no growth industry
THE BCG MATRIX
STARS :- High growth business competing in market where
they are relatively strong compared with the competition. They
have a high market shares and are the ideal businesses
CASH :- Low-growth business with a relatively high market
shares. These businesses were stars but now have lost their
attractiveness
QUESTION MARK :- Businesses with low market share but
which may have a high growth rate. This suggests that they
have potential but may require huge ever, a competing force
extraordinary effort in order to grow point share
DOGS :- Businesses that have low relative share and low
expected growth rate. Dogs may generate enough points to
sustain but they are rarely, if ever, a competing force
THE BCG MATRIX
Hold
Build
Harvest Divest
Strategy-Formulation Analytical
Framework
Stage 3:
The Decision Stage
Quantitative Strategic
Planning Matrix
(QSPM)
QSPM
Quantitative Strategic Planning
Matrix
Technique designed to
determine the relative
attractiveness of feasible
alternative actions
QSPM Strategic Alternatives
Key External Factors Weight S1 S2 S3
Economy
Political/Legal/Governmental
Social/Cultural/Demographic/
Environmental
Technological
Competitive
Key Internal Factors
Management
Marketing
Finance/Accounting
Production/Operations
Research and Development
Management Information
Systems
THANKS
