1. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 1 Corporate Directional Strategies

2. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 2 Corporate Strategy Directional Strategy: –Three Grand Strategies: Growth strategies Stability strategies Retrenchment strategies

3. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 3 Corporate Strategy Growth Strategies: –Most widely pursued strategies –External mechanisms: Mergers –Transaction involving two or more firms in which stock is exchanged but only one firm survives. Acquisition –Purchase of a firm that is absorbed as an operating subsidiary of the acquiring firm. Strategic Alliance –Partnership of two or more firms to achieve strategically significant objectives that are mutually beneficial.

4. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 4 Corporate Strategy 2 Basic Growth Strategies: –Concentration –Current product line in one industry –Diversification –Into other product lines in other industries

5. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 5 Corporate Strategy Basic Concentration Strategies: –Vertical growth –Horizontal growth

6. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 6 Corporate Strategy Concentration: Vertical growth –Vertical integration Full integration Taper integration Quasi-integration –Backward integration –Forward integration

7. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 7 Corporate Strategy Concentration: Horizontal Growth –Horizontal integration

8. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 8 Corporate Strategy Basic Diversification Strategies: –Concentric Diversification –Conglomerate Diversification

9. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 9 Corporate Strategy Diversification: Concentric: –Growth into related industry –Search for synergies

10. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 10 Corporate Strategy Diversification: Conglomerate: –Growth into unrelated industry –Concern with financial considerations

11. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 11 Corporate Strategy International Entry Options Exporting Licensing Franchising Joint Ventures Acquisitions Green-Field Development Production Sharing Turnkey Operations BOT Concept Management Contracts

12. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 12 Corporate Strategy Stability Strategies: –Pause/proceed with caution –No change –Profit strategies

13. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 13 Corporate Strategy Retrenchment Strategies: –Turnaround –Captive Company Strategy –Selling out –Bankruptcy –Liquidation

14. Prentice Hall, 2004Chapter 6 Wheelen/Hunger 14 International Portfolio Analysis 2 Factors: Country’s attractiveness Market size, rate of growth, regulation Competitive strength Market share, product fit, contribution margin, market support