STRATEGY Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Related Diversification Unrelated Diversification Table 4.1: Types of Alternative Organisational Strategies DEFINITION 2005 EXAMPLES INTEGRATION STRATEGIES Gaining ownership or increased control over distributors or retailers Seeking ownership or increased control of a firm's suppliers Seeking ownership or increased control over competitors Budget Rent-a-Car is opening car rental shops in Wal-Mart stores. Hotels, Inc. purchased a furniture producer. Federated Department Stores, the parent of Macy's and Bloomingdale's acquired May Department stores. INTENSIVE STRATEGIES Seeking increased market share for present products or services in present markets through greater marketing efforts. Introducing present products or services into new geographic area. Seeking increased sales by improving present products or services or developing new ones. Coca-Cola Co. is spending millions to advertise its new zero calorie drink called Coca-Cola. Bank of America recently purchased a 9 percent stake in China Construction bank, China's fourth largest lender. This is Bank of America's first big move into china. Advanced Medical Optics is using acquisition to obtain all medical aspects of eye care, from la- ser surgery to contacts to implants for all ages. DIVERSIFICATION STRATEGIES Adding new but related products or services UPS acquired Overnite to diversify its packaging business. Now UPS carries packages over 150 lbs, which for 98 years it has not done. Adding new, unrelated products or Tupperware Corp., the direct seller of services kitchenware, has entered and is growing its skin and beauty business through BeautiControl. DEFENSIVE STRATEGIES Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profits. Divestiture Liquidation Selling a division or part of an organisation Selling all the company's assets, in parts, for their tangible worth. Viacom is selling noncore assets including its theme parks, publishing business, radio stations, and movies theaters. Good year Tire & Rubber Co. sold its North American farm-tire business to Titan International. Britain's last major car manufacturer, MG Rover Group Ltd., liquidated in 2005 and laid off its 5000 employees. The firm had major manufacturing facilities at Longbridge in central England.

STRATEGY Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Related Diversification Unrelated Diversification Table 4.1: Types of Alternative Organisational Strategies DEFINITION 2005 EXAMPLES INTEGRATION STRATEGIES Gaining ownership or increased control over distributors or retailers Seeking ownership or increased control of a firm's suppliers Seeking ownership or increased control over competitors Budget Rent-a-Car is opening car rental shops in Wal-Mart stores. Hotels, Inc. purchased a furniture producer. Federated Department Stores, the parent of Macy's and Bloomingdale's acquired May Department stores. INTENSIVE STRATEGIES Seeking increased market share for present products or services in present markets through greater marketing efforts. Introducing present products or services into new geographic area. Seeking increased sales by improving present products or services or developing new ones. Coca-Cola Co. is spending millions to advertise its new zero calorie drink called Coca-Cola. Bank of America recently purchased a 9 percent stake in China Construction bank, China's fourth largest lender. This is Bank of America's first big move into china. Advanced Medical Optics is using acquisition to obtain all medical aspects of eye care, from la- ser surgery to contacts to implants for all ages. DIVERSIFICATION STRATEGIES Adding new but related products or services UPS acquired Overnite to diversify its packaging business. Now UPS carries packages over 150 lbs, which for 98 years it has not done. Adding new, unrelated products or Tupperware Corp., the direct seller of services kitchenware, has entered and is growing its skin and beauty business through BeautiControl. DEFENSIVE STRATEGIES Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profits. Divestiture Liquidation Selling a division or part of an organisation Selling all the company's assets, in parts, for their tangible worth. Viacom is selling noncore assets including its theme parks, publishing business, radio stations, and movies theaters. Good year Tire & Rubber Co. sold its North American farm-tire business to Titan International. Britain's last major car manufacturer, MG Rover Group Ltd., liquidated in 2005 and laid off its 5000 employees. The firm had major manufacturing facilities at Longbridge in central England.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

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You and a group of enthusiastic colleagues have recently graduated from university, and are
eagerly discussing a possible joint entrepreneurial venture, focusing on the production of
environmentally friendly electric vehicles. To fund this new venture, the team has been advised to
come up with a solid implementation plan, supported by the strategy implementation framework
to include detailed information on the business concept, strategic vision, mission, revenue model,
financial objectives, and projections and much more. The rising use of hybrid and environmentally
friendly electric vehicles (EVs) represents a significant shift in the automotive industry, with
various factors contributing to its increasing popularity, environmental awareness and climate
change concerns topping the list. Considering how competitive the business sector is today, it is
important that you also consider various alternative organizational strategies, as well as develop a
sustainable competitive advantage, to remain financially viable.

Business name is ECORYDES

Requirement

. Organizational Strategy
a) Based on the categories of alternative organizational strategies discussed in the
course, you are required to do the following:
o Select two appropriate categories.
o Identify one strategy from each category which you plan to pursue to
ensure success applicable to the scenario presented.
o Explain how the product or service you are offering would be implemented
through each category.

STRATEGY
Forward
Integration
Backward
Integration
Horizontal
Integration
Market
Penetration
Market
Development
Product
Development
Related
Diversification
Unrelated
Diversification
Table 4.1: Types of Alternative Organisational Strategies
DEFINITION
2005 EXAMPLES
INTEGRATION STRATEGIES
Gaining ownership or increased
control over distributors or retailers
Seeking ownership or increased
control of a firm's suppliers
Seeking ownership or increased
control over competitors
Budget Rent-a-Car is opening car rental shops
in Wal-Mart stores.
Hotels, Inc. purchased a furniture producer.
Federated Department Stores, the parent of
Macy's and Bloomingdale's acquired May
Department stores.
INTENSIVE STRATEGIES
Seeking increased market share
for present products or services in
present markets through greater
marketing efforts.
Introducing present products or
services into new geographic area.
Seeking increased sales by improving
present products or services or
developing new ones.
Coca-Cola Co. is spending millions to advertise
its new zero calorie drink called Coca-Cola.
Bank of America recently purchased a 9 percent
stake in China Construction bank, China's
fourth largest lender. This is Bank of America's
first big move into china.
Advanced Medical Optics is using acquisition to
obtain all medical aspects of eye care, from la-
ser surgery to contacts to implants for all ages.
DIVERSIFICATION STRATEGIES
Adding new but related products or
services
UPS acquired Overnite to diversify its packaging
business. Now UPS carries packages over 150
lbs, which for 98 years it has not done.
Adding new, unrelated products or Tupperware Corp., the direct seller of
services
kitchenware, has entered and is growing its skin
and beauty business through BeautiControl.
DEFENSIVE STRATEGIES
Retrenchment Regrouping through cost and asset
reduction to reverse declining sales
and profits.
Divestiture
Liquidation
Selling a division or part of an
organisation
Selling all the company's assets, in
parts, for their tangible worth.
Viacom is selling noncore assets including
its theme parks, publishing business, radio
stations, and movies theaters.
Good year Tire & Rubber Co. sold its
North American farm-tire business to Titan
International.
Britain's last major car manufacturer, MG
Rover Group Ltd., liquidated in 2005 and laid
off its 5000 employees. The firm had major
manufacturing facilities at Longbridge in central
England.

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