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