Chapter 4: Types of Strategies

To increase revenues and profits

To reduce employee turnover

To enhance customer satisfaction

To minimize operational costs

1 year

2 to 5 years

5 to 10 years

10 to 15 years

75% based on long-term objectives

50% based on annual objectives

25% based on long-term objectives

50% based on long-term objectives

Quantitative

Challenging

Ambiguous

Measurable

Provide direction by revealing expectations

Minimize conflict

Aid in design job

Stimulate exertion

Financial objectives focus on market share

Strategic objectives include growth in revenues

Financial objectives include higher dividends

Strategic objectives focus on product quality

Managing by objectives

Ignoring education

Expensive strategies

Using car wash products

Managing by Extrapolation

Managing by Crisis

Managing by Subjective

Managing by Hope

Market Penetration

Product Development

Horizontal Integration

Cost Leadership

Market Development

Product Development

Related Diversification

Unrelated Diversification

Corporate Level

Division Level

Functional Level

Operational Level

Vertical

Horizontal

Diagonal

Circular

Gaining ownership over suppliers

Selling directly to consumers

Establishing partnerships with retailers

Increasing product variety

When present distributors are especially expensive.

When the availability of quality distributors is limited.

When an organization competes in a declining industry.

When present distributors have high profit margins.

To acquire suppliers or raw materials

To increase product prices

To reduce production costs

To expand market reach

When present suppliers have high profit margins.

When the organization competes in a growing industry.

When the number of suppliers is small and the number of competitors is large.

When an organization needs to quickly acquire a needed resource.

A strategy to acquire companies at different production stages

A strategy to acquire companies at the same production stage

A method to reduce competition

A way to increase product variety

Market Penetration

Market Development

Product Development

Market Expansion

Increasing the number of salespersons

Reducing advertising expenditures

Offering fewer sales promotion items

Decreasing publicity efforts

Introducing new products

Expanding into new geographic areas

Reducing costs

Increasing market share

To reduce costs

To seek increased sales

To eliminate competition

To improve customer service