Critical Analysis of The Business Strategies

Offensive and defensive strategies be by increases or results of the integrated strategies. A collective strategy is a comprehensive set of activities positive by top management to aid an cheek achieve its corporate objectives. Involving each(prenominal) parts of an organization, these strategies consider both internal and external environments.As the name suggests these strategies are patterned at placing the organization in a bombardment mode of sorts. Organizations employing such strategies generally believe in acting before their opponent. such(prenominal) strategies are usually achieved done internal emersion, though some same mergers and acquisition, etc are external.Concentration on a single mathematical product or serv folderolThe smashed chooses to specialize in a single product, product tone, or service. It plans to do one thing with great forcefulness and efficiency. This specialization allows an organization to do whatever it does extremely well, perhaps even interrupt than other organizations. Used mostly by small organizations, it pores the amount of resources necessitate and as such is a low risk strategy. However, it ties up all of the firms resources on a single product, service, or product line.The firms success and produce is dependent entirely on that particular product with nothing to fire up back on were that product to fail. Also, coupled with the facts that this strategy limits an organizations growth and opportunities, it stomach be considered a high-risk strategy as well. E.g. a alliance decision making to specialize only in the drudgery and distribution of a particular brand of chocolate go out find their chances for growth and gain tied inexorably with the market acceptance of that chocolate. Failure of the product will spell doom for the go with.Despite these pitfalls, the concentration strategy has nevertheless borne growth for organizations like spend Inns. Considered one of the largest hotel chains in the world with 1800inns, Holiday Inns have achieved unparalleled success by focusing on the hospitality industry.Put plainly concentric diversification is said to be when a firm originally concentrating on one specific product, service, or product line decides to add related products or services to its already be retinue. These new products or services are added internally (i.e. it can be a management decision) or may be acquired through acquisitions. A good showcase is Cadbury. Though initially focusing on biscuits, the company today has an impressive line-up that includes not only biscuits, but also chocolates and ice cream as well.One of the major reasons why companies choose to preserve such a strategy is the potential for faster growth, and the lure of establishing a diverse if related product line. This ensures that if one product were to fail, there would nevertheless be something to fall back on.Vertical integrating occurs when one firm acquires another that is invo lved any in an earlier stage of the toil influence (backward integration) or a later stage of the production process (forward integration). The firm that is acquired usually follows the same line of business as that of the mention company. While backward integration will give the firm more(prenominal) than control oer the quality and quantity of its raw materials, forward integration will ensure that the firms products will enjoy a good demand.This occurs when a firm decides to branch out and add products or services that are unrelated to its existing products and services. Conglomerate diversification can occur through acquisitions or it may be based on management decisions. The answer in employing such a strategy is to increase sales and earnings, cattle farm risks, or in the case of acquisitions simply to make an attractive investment.An example is the heavy vehicles and industrial equipment manufacturer Caterpillar, who have branched out into the production of boots and accessories.A merger involves combining the operations of two companies to form a new and unified organization. Acquisitions on the other hand is the taking over of another firm but allowing the acquired firm to function as a independent division or subsidiary of the acquiring firm. The main aim of this strategy is to achieve growth both in sales and earnings, which it does more quickly than any internal strategies.An accurate example would be the fresh merger of carmakers Chrysler and Mercedes Benz. An example of acquisition would be BMWs takeover of Rolls Royce.Joint infer is when two or more firms combine resources to accomplish a job that an individual firm could not have done alone, or to do a job more efficiently. Considered as a means to carry out a strategy rather than a strategy, sum ventures scoreer a way for organizations to undertake projects and spread any risks as well as operate more efficiently. General Motors collaboration with Toyota is an example of a joint venture.Usually adopted by companies, who follow a wait and come across attitude, these strategies nevertheless help an organization achieve a good foothold in the market.Reducing the scope of operations or activities to improve effectiveness and efficiency is retrenchment. Organizations adopting such a strategy generally believe that qualification the organization more effective and efficient will give it a better chance to return to a higher level of advantageability. In some cases a firm may simply cut costs, reduce personnel, etc, but will decide to maintain all its current line of business, whereas, in extreme cases a firm may decide to capture rid of certain product lines or services.Divestment is when a firm spins off or sells fragments of its operations. The main reasons for such a situation to arise are a firm may have acquired another firm that either interferes or does not contribute to its current organization mission, a segment may not be functioning satisfactoril y enough to excuse the resources invested in it, or the segment might be earning a profit but the management decides its resources are better utilized elsewhere.Stopping the moderate in a firms performance and bringing a return to prospering performance involves turnaround. It combines a defensive strategy (retrenchment or divestment) with a growth strategy. The turnaround of Chrysler Corporation in early 1980s from a failing enterprise to a successful one is a good example.Usually a last resort strategy, it involves selling or disposing of the organization assets. The entire organization or only part of it may be sold. It occurs when turnaround was a failure or may not have been viable. Undertaken mainly to admit the stockholders a return on their investment, it is one of the most unpleasant strategies.The different offensive and defensive strategies are not separate, and are used in complement with one another. Most firms employ a variation or a mixture of the various strate gies. The only important factor is deciding which strategy will better suit the conditions presently being go about by the firm.