Strategic Management - Strategies in Action

STRATEGY | DEFINITION | COMPANY | EXAMPLE |

Forward Integration | Gaining ownership or increased control over distributors or retailers | General Motors | General Motors is acquiring 10% of its dealers. |

Backward Integration | Seeking ownership or increased control of a firm’s suppliers | Motel 8 | Motel 8 acquired a furniture manufacturer. |

Horizontal Integration | Seeking ownership or increased control over competitors | Hilton | Hilton recently acquired Promus. |

Market Penetration | Seeking increased market share for present products or services in present markets through greater marketing efforts | Ameritrade | Ameritrade, the on-line broker, tripled its annual advertising expenditures to $200 million to convince people they can make their own investment decisions. |

Market Development | Introducing present products or services into new geographic area | Henlys PLC | Britain’s leading supplier of buses, Henlys PLC, acquires Blue Bird Corp. North America’s leading school bus maker. |

Product Development | DefinedSeeking increased sales by improving present products or services or developing new ones | Apple | Apple developed the G4 chip that runs at 500 megahertz. |

Related Diversification | Adding new, but related, products or services | National West Minister Bank PLC | National West Minister Bank PLC in Britain bought the leading British insurance company, Legal & General Group PLC. |

Unrelated Diversification | Adding new, unrelated products or services | H&R Block | H&R Block, the top tax preparation agency, said it will buy discount stock brokerage Olde Financial for $850 million in cash. |

Retrenchment | Regrouping through cost and asset reduction to reverse declining sales and profit | Singer | Singer, the sewing machine company, declared bankruptcy. |

Divestiture | Selling a division or part of an organization | Harcourt General | Harcourt General, the large US publisher, is selling its Neiman Marcus division. |...