Resource Allocation:

Resources to SBUs can be allocated using: The BCG Growth-Share Matrix

Assessing Growth Opportunities:

DIVERSIFICATION GROWTH S A L E S INTEGRATIVE GROWTH

INTENSIVE GROWTH

TIME

Strategic Planning for Intensive Growth:

Product-Market Expansion Grid (Ansoffs Matrix)

Existing Products Existing Markets New Markets Market Penetration
(e.g. introduction of sachets)

New Products Product Development

Market Development
(e.g. Scorpio being exported to S. Africa, US etc.)

Diversification Strategies

Integrative Growth

Backward integration- Acquiring Suppliers

Gas Authority of India Ltd (GAIL) has invested in 29 exploration blocks and three coal bed methane (CBM) blocks Tamil Nadu Newsprint and Papers (TNPL), manufacturers of printing & writing paper and newsprint has set up a captive plantation to meet its material requirements. Exide Industries has picked up a 51% stake in Leadage Alloys India Ltd. (LAIL) to get raw material source of recycled lead and lead alloys for making storage batteries.

Integrative Growth (Cont):

Forward Integration - Acquiring Buyers

National Mineral Development Corporation (NMDC), from mining iron ore, is leapfrogging into steelmaking by investing Rs 16,000 crore in a new plant in Chhattisgarh that will have an annual capacity of four million tonnes XL Telecom, a solar panel manufacturer, is going to establish a grid connected solar farms in Spain and Portugal with an investment of Rs 1,000 crore.

Integrative Growth (Cont):

Horizontal Integration - Acquiring Competitors

HP acquires Compaq Jet acquires Air Sahara Tata steel acquires Corus Mittal steel acquires Arcelor Hindalco acquires Novelis Videocon acquires Thomsons CPT plant Videocon acquires Daewoo Electronics

Diversification Growth:

Concentric Diversification Strategy:

Technological/marketing synergy with existing product line that may appeal to different group of customers.
E.g. Tata Motors going in for Nano, IIMs offering Executive MBAs

Horizontal Diversification Strategy:

Technologically unrelated products that could appeal to current customers.
E.g. Microsoft key-board and mouse

Diversification Growth (Cont):

Conglomerate Diversification Strategy: No relation to companys current technology, product or market.

Tata group manufactures cars as well as salt Godrej group manufactures soaps as well as furniture ADAG is into telecommunications as well as financial services Aditya Birla group is into manufacture of textiles as well as cement

Strategic Alliances:

Product or Service Alliance Promotional Alliance Logistics Alliances Pricing Collaborations

Bodycopy: India's largest selling washing machine deserves a detergent that is as good. At Videocon, we recommend new Surf Excel. Because new Surf Excel is perfectly suited to top-loading machines like ours. So show your clothes you care. USE NEW SURF EXCEL.

Bodycopy: When the world's top carmakers need a more efficient way to collect spare parts from overseas, they turn to the company with three red lines in its logo. Whatever your business needs whether it's car parts, textiles or anything else, DHL puts you in control of your goods through to their destination. You'll have a single partner with proven customs expertise taking complete responsibility for all of your shipments worldwide.

Business Strategic Planning

Planning Involves Eight Steps:
Business Mission SWOT Analysis: Internal SWOT Analysis: External Goal Formulation

Strategy Formulation Program Formulation Implementation Feedback and Control