TYPES OF

STRATEGIES
Let's provide strateic planning in your
business so that everything is directed
and runs well.

PRESENTED BY,
GROUP 6
LEARNING OBJECTIVES
•Identify and discuss eight
characteristics of objectives and ten
benefits of having
clear objectives.
•Define and give an example of eleven
types of strategies.
•Identify and discuss the three
types of “Integration Strategies.
LONG-TERM OBJECTIVE

Long-term objectives represent the results

expected from pursuing certain strategies.
8 CHARACTERISTICS
OF OBJECTIVES
1. QUANTITATIVE
objectives which can be expressed in specific numerical
terms
2. MEASURABLE
are objectives that helps you determine if you are making
progress
3. REALISTIC
the one hat's achievable and manageable within your
current circumstances
4. UNDERSTANDABLE
ideally describe a direction for the business to
acquire new knowledge, skills, and attitudes
5. CHALLENGING
ones that attempt to push the individual or team
beyond heir current capabilities and potential
6. HIERARCHICAL
a tool that helps analyze and communicate the
project objectives
7. OBTAINABLE
your goal needs to be realistic and attainable to
be successful

8. CONGRUENT ACROSS DEPARTMENTS

ensures the achievement of organization's
strategic objectives and ensures coordination and
motivation of all employees concerned
TEN BENEFITS OF HAVING
CLEAR OBJECTIVES
1.Provide direction 5.Reduce uncertainty
by revealing
expectations
2.Allow synergy
3.Assist in
evaluation by
serving as
standards
4.Establish
priorities
6.Minimize conflicts e basis for
7.Stimulate exertion consistent
8.Aid in decision making
allocatio
n of
resource
s
9.Aid in design of
jobs
10. Provid
ELEVEN TYPES
OF STRATEGIES
1. FORWARD INTEGRATION
Gaining ownership or increased control over
distributors or retailers.
2. BACKWARD INTEGRATION
Seeking ownership or increased control of a firm’s
suppliers
3. HORIZONTAL INTEGRATION
Seeking ownership or increased control over
competitors
4. MARKET PENETRATION
Seeking increased market share for present products or
services in present markets through greater marketing
efforts
5. MARKET DEVELOPMENT
Introducing present products or services into new
geographic area
6. PRODUCT DEVELOPMENT
Seeking increased sales by improving present products or
services or developing new ones
7. RELATED DIVERSIFICATION
Adding new but related products or services
8. UNRELATED DIVERSIFICATION
Adding new, unrelated products or services
9. RETRENCHMENT
Regrouping through cost and asset reduction to reverse
declining sales and profit
10. DIVERSTITURE
Selling a division or part of an organization
11. LIQUIDATION
Selling all of a company’s assets, in parts, for their tangible
worth.
 4.3: Three types of
integration strategies
1. Forward Integration:
•This strategy involves gaining ownership
or increased control over distributors or
retailers. It allows manufacturers or producers
to establish direct control over the channels
that distribute their products to consumers.
2. Backward Integration:
•This strategy focuses on
gaining ownership or control of a
firm’s suppliers, ensuring a stable
supply of materials, and reducing
reliance on external suppliers.
 3. Horizontal Integration:
•In this strategy, a firm seeks ownership or control
over competitors, typically through mergers or acquisitions.
Horizontal integration helps companies expand their
market share and reduce competition by combining
resources and reducing redundancy.
4:4 Specific guidelines when market
penetration, market development
and product development are
especially effective strategies
Market Penetration
Aims to increase a company’s market share within existing
markets. This involves attracting more customers to existing
products or services. The goal is to boost sales and improve
market presence without altering the product or entering new
markets.
Low Market Saturation
Increasing Usage Rates
Competitive Shakeup
Market Development
Market development involves introducing existing
products or services to new geographic areas or
demographic segments. The goal is to expand the market
reach of a company’s products, thereby increasing sales and
diversifying the customer base.
New Distribution Channels
Success in Current Operations
Untapped Markets
Product Development
Product development focuses on creating new products or
modifying existing ones to meet changing customer needs or
technological advancements. Their aim is to innovate and enhance
product offerings, thereby attracting new customers or
encouraging repeat purchases from existing ones.
Maturity of Product Life Cycle
Technological Advancements
Quality Competition
High-Growth Industries
DIVERSIFICATION
STRATEGIES
What is Diversification Strategy?
A diversification strategy is a practice that
companies use to help expand their business. By
branching out into new product offerings or
markets, companies can promote financial
security, industry growth and the acquisition of a
larger target audience
Two general types of Diversification Strategies

1. Related Diversification
2. Unrelated Diversification
What is Related Diversification?

Business is said to be related when their value

chains possess competitively valuable cross
business strategic fits.
Most common companies favor related diversification
strategies to capitalize on synergies as follows:
Transferring competitively valuable expertise,
technological know-how, or other capabilities from
one business to another.
Combining the related activities of separate
businesses into a single operation to achieve lower
costs.
Exploiting common use of a well-known brand
names.

Cross business collaborations to create

competitively valuable.

Cross- business collaboration to create

competitively valuable resource strengths and
capabilities.
The guidelines for when related diversification may be
an effective strategy are as follows:

An organization competes in a no-growth or a slow-

growth industry.
Adding new, but related, products would
significantly enhance the sales of current products.
 New, but related, product could offer at highly
competitive prices.

New, but related products have seasonal sales levels

that counterbalance an organization’s existing peaks
and valleys.

An organizations product is currently in the declining

stage of the product’s life cycle.
What is unrelated diversification?

Business is said to be unrelated when their value

chains are so dissimilar that no competitively
valuable cross- business relationship exist.
10 Guidelines when unrelated diversification may be an
especially effective strategy:

Revenues derived from an organizations current

product or services would increase significantly by
adding the new, unrelated products
An organization competes in highly competitive or a
no-growth industry, as indicated by low industry
profit margins and returns
An organization’s present channels of distribution can be
used to market the new products to current customers
New products have countercyclical sales patterns
compared to an organization’s present products.
An organization’s basic industry is experiencing
declining annual sales and profits.
An organization has capital and managerial talent needed
to compete successfully in anew industry.
 An organization has the opportunity to purchase an
unrelated business that is an attractive
Financial synergy exists between the acquired and
acquiring firm.
Existing markets for an organization’s present products
are saturated.
Antitrust action could be charged against an organization
that historically has concentrated on a single industry.
Retrenchment (Turnaround or
Reorganization)
 Companies may need to restructure in several
situations: when facing losses or declining market
share, overextending operations, or needing to cut
costs due to market demands for cheaper products.
Internal problems can also contribute to
unprofitability, prompting restructuring efforts.
Additionally, stakeholder pressures for greater
efficiency and cost reductions often drive the need for
operational changes.
Divestiture
 Companies may need to restructure when a division or
subsidiary is no longer viable or aligned with the firm’s
strategic goals. This is also necessary when cash is
required to pay debts or invest in more profitable areas.
Consolidation might be needed to focus on specific
strategic operations, especially after mergers and
acquisitions (M&A) to eliminate non-essential divisions.
Additionally, if market trends suggest that certain
segments can’t compete profitably, restructuring
becomes crucial.
Liquidation
Liquidation occurs when a company faces severe financial difficulties
and can no longer operate profitably in the market. This situation
often arises when a company's assets hold more value than the
bmklm lusiness itself, allowing for potential loss minimization
through asset sales. If a viable strategy to exit bankruptcy cannot be
developed, liquidation becomes the last resort after attempting other
management strategies like retrenchment and divestiture.
Additionally, if the business model is no longer relevant due to
changing environmental or industry factors, liquidation may be
necessary.
 PORTER'S
5 GENERIC
STRATEGIES
LEARNING OBJECTIVES
• Identify and discuss Porter's five
generic strategies.
• Compare (a) cooperation among competitors,
(b) joint venture and partnering (c)
merger/acquisition as key means for achieving
strategies.
 PORTER'S GENERIC STRATEGIES
1.) COST LEADERSHIP
Objective:
Become the lowest-cost producer in
the industry.
 COST LEADERSHIP
KEY CHARACTERISTICS:
- Efficient production processes to achieve
economies of scale.
- Tight cost control and cost minimization
throughout the value chain.
-Price competitiveness to attract the market.
 COST LEADERSHIP
TARGET:
Aims at a broad market, appealing
to cost-sensitive costumers.
 COST LEADERSHIP
EXAMPLE 1: JOLLIBEE
 INDUSTRY: Fast Food
Jollibee focuses on providing affordable meals for
the mass market. By optimizing its supply chain,
sourcing ingredients locally, and streamlining
operations, Jollibee maintains competitive pricing
while catering to a broad consumer base.
 COST LEADERSHIP
EXAMPLE 2: PUREGOLD
 INDUSTRY: Grocery/Retail
Puregold targets low- to middle-income consumers
by focusing on affordable prices and discount offers.
It uses efficient supply chains and procurement
processes, and it emphasizes promotions and bulk
selling to provide lower prices compared to other
grocery chains.
 PORTER'S GENERIC STRATEGIES
2.) COST FOCUS
Objective:
Target a narrow segment of the market but
with a focus on achieving the lowest cost
within that segment.
 COST FOCUS
KEY CHARACTERISTICS:
- Targets a specific niche market.
- Emphasizes cost minimization within the
niche.
- Offers competitive pricing.
- May still differentiate product/services
 COST FOCUS
KEY CHARACTERISTICS:
- Requires deep understanding of customer
needs.
- Demands flexibility and adaptability
-Involves careful risk management
 COST FOCUS
TARGET:
Minimizing costs and offering competitive
prices to specialized group of customers to
gain competitive edge in the industry.
 COST FOCUS
EXAMPLE 1: 7 ELEVEN
 INDUSTRY: Retail/ Convenience Store
7-Eleven provides budget-friendly snacks, meals,
and basic necessities. Their focus on cost-effective
products appeals to consumers looking for quick,
affordable options.
 COST FOCUS
EXAMPLE 2: DAIRY QUEEN
 INDUSTRY: Fast Food (Dessert)
Dairy Queen offers a value menu targeting budget-
conscious consumers seeking affordable desserts
and treats, focusing on quality at lower price points.
 PORTER'S GENERIC STRATEGIES
3.) DIFFERENTIATION
Objective:
Offers products or services that are unique
and valued by customers.
 DIFFERENTIATION
KEY CHARACTERISTICS:
- Emphasis innovation, quality, brand
image, and marketing.
- Product features and attributes that
distinguish the offering from competitors.
 DIFFERENTIATION
KEY CHARACTERISTICS:

- Focus on premium pricing to cover the

cost of differentiation.
 DIFFERENTIATION
TARGET:
Target a broad market or specific segments
willing to pay a premium for unique
features.
 DIFFERENTIATION
EXAMPLE 1: APPLE
 INDUSTRY: Technology
Apple products, such as the iPhone, iPad, and Mac,
are known for their sleek, minimalist design and
high-quality materials. The company invests heavily
in research and development to create innovative
products that stand out from competitors.
 DIFFERENTIATION
EXAMPLE 2:
 INDUSTRY: Sportswear and Athletic footwear
Nike invests heavily in research and development to
create innovative and high-performance athletic
footwear, apparel, and equipment. Technologies like
Nike Air, Flyknit, and Dri-FIT set their products
apart from competitors
 PORTER'S GENERIC STRATEGIES
4.) FOCUS DIFFERENTIATION
Objective:

Concentrate on a specific market segment

or niche.
 FOCUS DIFFERENTIATION
KEY CHARACTERISTICS:
- Tailoring products or services to meet the
needs of a particular segment.
- Developing expertise and competitive
advantage in a narrow market scope.
 FOCUS DIFFERENTIATION
KEY CHARACTERISTICS:

- Flexibility to adapt to the specific demands

of the chosen segment.
 FOCUS DIFFERENTIATION
TARGET:
Targets a narrow market segment or niche
where the company can excel.
 FOCUS DIFFERENTIATION
EXAMPLE 1: ROLLS ROYCE
 INDUSTRY: Automotive
Rolls-Royce targets a niche market of affluent
consumers who are seeking high-end, luxury
vehicles. Their branding and marketing emphasize
exclusivity, craftsmanship, and prestige, appealing
specifically to wealthy individuals.
 FOCUS DIFFERENTIATION
EXAMPLE 2: ROLEX
 INDUSTRY: Luxury Watch
Rolex targets a niche market of affluent consumers
looking for high-end, luxury timepieces. The brand
is synonymous with prestige and exclusivity,
appealing specifically to wealthy individuals and
collectors.
 PORTER'S GENERIC STRATEGIES
5.) COMBINATION STRATEGIES
Objective:
Compaies can also pursue a combination of
these strategies.
 COMBINATION STRATEGIES
COST LEADERSHIP WITH
DIFFERENTIATION (HYBRID)

Offering reasonably price products with

some unique features.
 COMBINATION STRATEGIES
COST FOCUS : Concentrating on cost leadership
within a specific market segment.
DIFFERENTIATION FOCUS: Offering
unique products or services within a
narrow market segment.
 COMBINATION STRATEGIES
EXAMPLE 1: TOYOTA
 COMBINATION STRATEGIES
EXAMPLE 2: AMAZON
 INDUSTRY: E-commerce
Amazon has established itself as a dominant player
in e-commerce and technology. This dual approach
allows the company to attract a wide range of
customers, foster loyalty, and continuously innovate
while maintaining competitive pricing
MEANS FOR ACHIEVING
STRATEGIES
 MEANS FOR ACHIEVING STRATEGIES

1.) COOPERATION AMONG

COMPETITORS
For collaboration between competitors to succeed,
both firms must contribute something distinctive;
technology, distribution, basic research and
manufacturing capacity
 COOPERATION AMONG
COMPETITORS
EXAMPLE :
 MEANS FOR ACHIEVING STRATEGIES

2.) JOINT VENTURE/PARTNERING

Occurs when two or more companies
forms a temporary partnership or
consortium for the purpose of
capitalizing on some opportunity.
 JOINT VENTURE/ PARTNERING

EXAMPLE: TOYOTA AND

PANASONIC
 MEANS FOR ACHIEVING STRATEGIES

3.) MERGER ACQUISITION

MERGER: Occurs when two organization of
about equal size unite to form one enterprise.

ACQUISITION: Occurs when large organizations

purchases (aquires) a smaller firm or vice versa.
 MERGER ACQUISITION

EXAMPLE: DISNEY AND PIXAR

 Nine Reasons Why Many Mergers and
Acquisitions Fail
1. Integration difficulties
2. Inadequate evaluation of target
3. Large or extraordinary debt
4. Inability to achieve synergy
5. Too much diversification
6. Managers overly focused on acquisitions
7. Too large an acquisition
8. Difficult to integrate different organizational cultures
9. Reduced employee morale due to layoffs and relocations
 MEANS FOR ACHIEVING STRATEGIES

4.) PRIVATE EQUITY ACQUISITION

Buy firms at low price and sell them later at a high

price
 PRIVATE EQUITY ACQUISITION
EXAMPLE: CARLYLE GROUP AND DUNKIN
BRANDS
 Eleven Potential Benefits of Merging with or
Acquiring Another Firm
1. To provide improved capacity utilization
2. To make better use of the existing sales force
3. To reduce managerial staff
4. To gain economies of scale
5. To smooth out seasonal trends in sales
6. To gain access to new suppliers, distributors, customers, products, and creditors
7. To gain new technology
8. To gain market share
9. To enter global markets
10. To gain pricing power
11. To reduce tax obligations
LEARNING OBJECTIVES
• Discuss tactics to facilitate strategies,
such as (a) being a first mover, (b)
outsourcing, and (c) reshoring.
• Explain how strategic planning
differs in for-profit, not-for-profit,
and small firms.
Tactics to Facilitate
Strategies
Strategists use numerous tactics to
accomplish strategies, including
being a "first mover," outsourcing,
and reshoring. There are
advantages and disadvantages of
such tactics;
First Mover
Advantages
It refers to the benefits a firm may achieve by
entering a new market or developing a new
product or service prior to rival firms. To sustain
the competitive advantage gained by being the
first mover, a firm needs to be a fast learner.
First mover advantages tend to be greatest
when competitors are roughly the same size
and possess similar resources. Samsung is an
example in the smartphone business. Apple
has always been a good example of a first
mover firm.
Five Benefits of a
Firm Being the
First Mover:
 •Secure access and
commitments to rare resources.

•Gain new knowledge of critical

success factors and issues.
•Gain market share and position in the
best locations.
•Establish and secure long-term
relationships with customers, suppliers,
distributors, and investors.
•Gain customer loyalty and
commitments.
 OUTSOURCING
AND RESHORING
 OUTSOURCING
Involves companies hiring other companies
to take over various parts of their functional
operations, such as human resources,
information systems, payroll, accounting.
customer service, and even marketing.
 EXAMPLE
Satellite Office, Accenture Technology
Solutions, TaskUs, Telus International,
Magellan Solutions
Thirteen Potential
Benefits of
Outsourcing
 •Cost savings: Access lower wages in
foreign countries.
•Focus on core business: Focus
resources on developing the core
business rather than being distracted by
other functions.
 •Cost restructuring: Outsourcing
changes the balance of fixed costs to
variable costs by moving the firm more
to variable costs. Outsourcing also
makes variable costs more predictable.
 •Improve quality: Improve quality by
contracting out various business
functions to specialists.
•Knowledge: Gain access to intellectual
property and wider experience and
knowledge.
•Contract: Gain access to services within
a legally binding contract with financial
penalties and legal redress. This is not
the case with services performed
internally.
•Operational expertise: Gain access to
operational best practice that would be
too difficult or time consuming to
develop in-house.
• Access to talent: Gain access to a
larger talent pool and a sustainable
source of
skills, especially science and
engineering.
•Catalyst for change: Use an outsourcing
agreement as a catalyst for major change
that cannot be achieved alone.
•Enhance capacity for innovation: Use
external knowledge to supplement
limited in-house cарас- ity for product
innovation.
 •Reduce time to market: Accelerate
development or production of a product
through additional capability brought by
the supplier.
 •Risk management: Manage risk by
partnering with an outside firm.

• Tax benefit: Capitalise on tax incentives

to locate manufacturing plants to avoid
high taxes in various countries.
 RESHORING
is the new term that refers to U.S.
companies planning to move some of
their manufacturing back to the
United States.
 Walmart, for example, is spending an
added
$250 billion in the next 10 years on USA-
made goods. Consequently, numerous
Walmart suppliers, such as Element
Electronics based in Eden Prairie,
Minnesota, are bringing manufacturing
and assembly operations back to the
United States.
 Seven benefits of
reshoring back into the
United States are as
follows:
 •Stable wages
•Reduced gas and electricity
costs
•Excellent security to protect
designs from overseas copycats
•Enable closer tabs on quality
control and supply chains
•Less shipment costs with
consumers nearby
 •Excellent human rights,
education, legal, and
political
systems that promote freedom
and opportunity
Strategic Management in
Nonprofit, Governmental,
and Small Firms
Nonprofit organizations are basically just
like for-profit companies except for two
major differ- ences: (1) nonprofits do not
pay taxes and (2) nonprofits do not have
shareholders to provide cap- ital.
 The strategic-management process is
being used effectively by countless
nonprofit and governmental
organizations, such as the Girl Scouts, Boy
Scouts, the Red Cross and so on.
 The nonprofit sector, surprisingly, is by
far the largest employer in the United
States. Many nonprofit and
governmental organizations outper- form
private firms and corporations on
innovativeness, motivation, productivity,
and strategic management.
Compared to for-profit firms, nonprofit
and governmental organizations may
be totally dependent on outside
financing. Especially for these
organizations, strategic management
provides an excellent vehicle for
developing and justifying requests for
needed financial support.
 Nonprofits and governmental
organizations owe it to their
constituencies to gar- ner and use
monies wisely; that requires excellent
strategy formulation, implementation,
and evaluation.
 EDUCATIONAL INSTITUTION
The world of higher education is rapidly
moving to online courses and degrees.
Educational institutions are more
frequently using strategic-management
techniques and
con- cepts.
 For example, President Obama's call
for free community college education
for all could also erode attendance in
four- year colleges 100 and 200-level
courses. All institutions of higher
learning need an excellent strategic
plan to survive and prosper.
 MEDICAL ORGANIZATIONS
Many private and state-supported
medical institutions are in financial
trouble as a result of tradi tionally
taking a reactive rather than a
proactive approach in dealing with their
industry.
Current strategies being pursued by many
hospitals include creating home health
services, establishing nursing homes, and
forming rehabilitation centers. Millions of
people annually research medical
ailments online, causing a dramatic
shift in the balance of power between
doctor, patient, and hospitals.
 EXAMPLE
World Health Organization, Philippine
Medical Association, Malasakit Center,
Department of Health/ Republic of the
Philippines, National Health Service,
Philippine Health Insurance Corporation
 GOVERNMENTAL AGENCIES
AND DEPARTMENTS
are finding that their employees get about the
opportunity to participate in the strategic-
management process and thereby have an effect
on the organization's mission, objectives,
strategies, and policies.
 In addition, government agen- cies are
using a strategic-management approach
to develop and substantiate formal
requests for additional funding.
 EXAMPLE
Department of Justice, Philippine
National Police, Department of Finance,
Department of Trade and Industry,
National Science Foundation.
 SMALL FIRM
Almost everyone wants to own a business-
from teens and college students, who are
signing up for entrepreneurial courses in
record numbers, to those older than age 65,
who are forming more companies every year.
The strategic-management process is just as
vital for small companies as it is for large
firms. From their inception, all organizations
have a strategy, even if the strategy just
evolves from day-to-day operations.
THANK YOU
 PRESENTED BY,

CASTRO, KIA

KATHRINA DIOLAN,

JASPER R. GALANG

DONNA MAE

GUNTAYON, KC B.

LAGGUI, AMANDA
ROJALES, JOHN

ROVICH