Strategic Management

（战略管理）
Lecturer : Huo Mingkui （霍明奎）
Student : Jabri Bin Juhinin （加比利）
 11 Types of strategies
Strategy Definition Example

Forward Gaining ownership or increased Amazon began rapid delivery

Integration control over distributors or retailers services in some U.S. cities.

Backward Seeking ownership or increased Starbucks purchased a coffee

Integration control of a firm’s suppliers farm.

Horizontal Seeking ownership or increased BB&T acquired Susquehanna

Integration control over competitors. Bancshares.

Seeking increased market share for

Market present products or services in Under Armour signed tennis
champion Andy Murray to a 4
Penetration present markets through greater
year, $23 million marketing deal.
marketing efforts

Market Introducing present products or Gap opened its first five stores in
Development services or developing new ones China.
 Strategy Definition Example
Seeking increased sales by Amazon just began offering its
Product
Development improving present products or own line of baby diapers and
services or developing new ones wipes.

Facebook acquired the text-

Related Adding new but related products or
messaging firm WhatsApp for $19
Diversification services.
billion.

Unrelated Adding new, unrelated products or Kroger and Whole Foods Market
are cooking meals, becoming
Diversification services.
restaurants.

Regrouping through cost and asset Staples closed 250 stores and
Retrenchment reduction to reverse declining sales reduced by 50% the size of other
and profit. stores.

Sears Holding divested its Land’s

Selling a division or part of an
Divestiture organization End division to Sear’s
shareholders.

Selling all of a company’s assets, in

Liquidation ………..
parts, for their tangible worth.
No. Action Type of strategies used
Dunkin’ Donuts is increasing the
1 number of its U.S. stores to over 15000. Market Penetration

Brown-Forman Corp. selling its

2 Hartmann luggage and leather-goods Liquidation
business.
Motorola, which makes TVs, acquired
3 Terayon Communication, a supplier of Related Diversification
TV equipment.
Macy’s department stores adding bistro
4 and Starbucks coffee shops at many of Unrelated diversification
its stores.
Dell allowing Wal-Mart to begin selling
its computers. This was its first move
5 away from direct mail order selling of Forward Integration
computers.

6 Motorola cutting 7500 additional jobs. Retrenchment

No. Definition Type of strategies used
Hilton Hotels building 55 new properties
7 in Russia, the United Kingdom, and Market Development
Central America.

Video-sharing websites YouTube

8 launching its services in nine new Market Development
countries.

Cadbury Schweppes PLC, the maker of

9 Trident gum, buying Turkish gum maker Retrenchment
Intergum.

General Electric selling its plastic

10 division for $11.6 million to Saudi Basic Divestiture
Industries Corp. of Saudi Arabia.

Cadbury Schweppes PLC, the maker of

11 Trident gum, buying Turkish gum maker Backward Integration
Intergum.

Limited Brands selling its Express and

Limited divisions to focus on its
12 Divestiture
Victoria’s Secret and Bath&Body Works
divisions.
 Questions:
1. How well does Tiger Brand’s vision and mission
statements help narrow down feasible alternative
strategies available for the firm?
2. Does Tiger Brand pursue a cost leadership,
differentiation, or focus strategy? Evaluate its strategic
approach in comparison to its competitors.
 Answer 1
Vision of Tiger Brands Limited:
• The company’s Vision reflects its long-term target to complete the respect and
admiration of its peers, the business society, its business associates and all of its other
stakeholders. Tiger Brands strives to be a high performing, fast-moving consumer goods
company of immaculate business reputation, with leading brands, operating across the
world in a number of selected emerging market territories.
Mission of Tiger Brands Limited:
• To deliver income increase that is 3% larger than South Africa’s GDP growth plus
inflation; and reach an operating margin of 15%, in that way generating actual earnings
growth and a return on investment which exceeds the company’s cost of investment.
• To be a high performing, fast–moving consumer goods company with leading brands,
operating across the globe in several selected emerging territories. It is very deep and
reliant statement. As it wants to capture market share. It uses various kind of generic
and grand strategies for achieving its goals and objectives. It narrowed downs its various
strategies by telling that it wants to be leading brand in FMCGs so it does not use
strategies of stability as it wants to adopt various kinds of diversification strategies.
Through the statement we came to know that it is at growing stage and does not have
to adopt retrenchment or liquidation strategies.
• So it’s vision and mission statement narrowed down the stability,
retrenchment and turnaround strategies and wants to adopt and follow the
various expansion and diversification strategies in respect to concentration
and integration strategies to become the market leader and product
leadership.
• The strategy is always for the long period of the time. It cannot be for short
term because there are so many resources associated with the vision and
mission of the company. So their aim is to be the world’s most admired brand
for consumer packaged-goods in emerging markets.
• Tiger Brand is also working towards high performance, fast-moving company.
• Drive South African volume growth to maintain and grow market shares and
expand into adjacent markets.
• Step change expansion in emerging markets to accelerate growth.
 Answer 2
Tiger brand should pursue cost leadership strategy. Because if you’re goal is to be a cost
leader, it’s good to keep the following things in mind:
1. Don’t lead on low price when you can’t lead on low cost. If your costs are
fundamentally lower relative to the competition, then by all means lead with low
prices to the consumer. If you’re costs are not fundamentally lower than the
competition and you attempt to lead with low prices in the market, you better have a
lot of cash lying around because that’s what you need to stay afloat for very long.
2. Do what the talents of you and your employees lend your organization to do. If your company
is full of people who are fantastic at accounting, process improvement, lean manufacturing,
supply chain management and tend to be frugal individuals then become a cost leader.
Employees like that are born with cost leadership DNA and can be counted on to reduce costs for
you. However, if your company consists of many highly creative people who excel in design then
you probably ought to become a benefit leader.
3. Realize that some markets will force you to become a cost leader – or you could go out of
business. For example in situations like on a farm where alfalfa, corn and peas are sold for a living.
Because these are commodities (a commodity is something that can’t easily be distinguished in
terms of superior or different benefits) the only way we could be profitable was by cutting costs
as much as possible without impacting production and yield. It’s hard to claim that your corn
tastes better than somebody else’s corn! To most people, corn is corn regardless of where it came
from or who grew it.