Strategic alternatives

POST SWOT & ENVIORNMENT ANALYSIS S W O T IDENTIFIED NEED TO ACT- STRATEGIC O OPTIONS

 TWO BROAD TYPES OF ALTERNATIVES:

1) TO BE PURSUEDBY THE FIRM BYITSELF 2) TO BE PURSUED BY THE FIRM IN COLLABORATION WITH OTHER FIRMS

STRATEGIC ALT- TO BE PURSUED BY FIRM ITSELF

Modennisation Integration Diversification Turnaround Restructuring Disinvestment Liquidation

STRATEGIC ALT- TO BE PURSUED BY FIRM WITH OTHER FIRMS

Mergers & Acquisitions Takeovers J VS

Modernisation
Meaning: Adopting modern methods and processes Uopdated techniques in marketing and production of goods

Purposes
Improved quality of goods Better Service to Customers

Modernisation Measures
Use Improved quality of R Mat Up to date Machinery/Equip/tools Use Latest processes and techniques Chooses latest Adv and Promotion techniques

Integration
Combintion of business units that are complementary to one another but are separate HORIZANTAL- Integrating with COMPETITOR VERTICAL Integrating with RAW MAT CO or FINISHED GOODS CO

ADVANTAGES OF INTEGRATION
BETTER CONTROL OVER RAW MATERIAL ECONOMIES OF SCALE EFFICIENCY

DIVERSIFICATION
SPREADING OVER SEVERAL PRODUCTS OR INDUSTRIES.

OBJECTIVES OF DIVERSIFICATION
SPREAD RISKS SHAREHOLDER VALUE IMMPROVE COMPETITIIVE POSITION IMPROVE LONG TERM PROFITBILITY

PURPOSES OF DIVERSIFICATION
AVOID OVERSPECIALISATION REMOVE BOREDOM DUE TO MONOTONY WIDENED GROWTH OPPORTUNITY

TYPES OF DIVERSIFICATION
INTERNAL CONCENTRATIC INTERNAL CONGLOMERATE

TURNAROUND
AIMS AT 1) ARRESTING SLOW DOWN 2) REVERSE THE DOWNWARD SLIDE AND TURNAROUND THE FIRM TO A PATH OF RECOVERY

MAJOR APPROACHES TO TURNAROUND

COST REDUCTION ASSET REDUCTION DROPPING PRODUCTS DROPPING MARKETS DROPPING FUNCTIONS

RESTRUCTURING