Discuss the four basic corporate strategy alternatives Under

Discuss the four basic corporate strategy alternatives. Under what circumstances are each of the strategies utilized?

Solution

Four basic corporate strategy alternatives are as follows:

It is an approach that is employed by those firms who focus on products and services defined in their business charter. It helps them to achieve incremental improvement upon what is offered at present. It is a less risky approach with focus upon functional improvement.

Stability strategy is used in those circumstances where firms want to stabilize their earning and consolidate their position in the market. It improve the bottom line of the company. It is adopted in stable business environment.

Sub types of stability strategy are as follows:

Expansion strategy is an approach followed by firms who want rapid growth through different offerings of products and services to different target masses. It can be done through:

Expansion strategy is an alternative that is utilized when greater market share is to be captured in smaller time frame. When, focus is to achieve growth in topline rather bottom line. Then, expansion strategy is used.               

It is utilized when a firm is running in to losses. It needs a turnaround and strict measures are to be taken. The process begins with removal of all types of waste in the firms and functions are made lean to improve the productivity. Loss making functions can be sold also to generate revenue that will be utilized to improve other functions. It has following sub types.

It is an alternative that focuses on combination of above mentioned corporate strategies (Stability, diversification, retrenchment). Firms utilize this approach when they think differently to their different strategic business units. Thus, they adopt combination of approach to take strategic initiatives