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CORPORATE STRATEGY: MEANING AND TYPES
Sonam Topwal
MBA, M.com, UGC NET
MEANING
It is very important for an organization to take right decisions at the right time. So a right strategy plays an important role in giving a direction to the organization.

Corporate strategies include Expansion, Stability and Retrenchment.
EXPANSION STRATEGY
Also known as growth strategy. Here the firm tries to expand in the following ways:

Concentration: When the firm either adds new features to the existing product, or gives certain sales discounts or enter new market segments or completely a new market, it is said to be intensifying its reach.
Integration: Here the firm tries to grow either vertically or horizontally i.e. either acquiring its supplier or operations supporting company or completely an unrelated company.

Diversification: It can be concentric or conglomerate. When firm acquires a related firm it is said to be a concentric diversification and when it is acquiring unrelated firm it is conglomerate diversification
STABILITY STRATEGY
New competitors keep entering a market and therefore It becomes indispensable to maintain the market share.

Stability strategies are used for same. The company can either choose to remain stable or follow no change strategy or it can also also go for profit strategy by cutting costs or raising prices. Finally it can also go for caution strategy.
RETRENCHMENT STRATEGY
Sometimes it so happens that a company comes into a weak competitive position. The company may suffer with lack of enhanced technology, processes etc.

Various strategies like Turnaround, Divestment, Bankruptcy and liquidation can be followed at this stage depending on the situation.
Lets Practice
Which strategy can be followed by a company to enter into new markets by acquiring unrelated firms?

Concentration
Integration
Market Development
Diversification
Which of the following is the retrenchment strategy?

Caution
Integration
Turnaround
All of the above
CHAPTER
00:00 Corporate Strategy Meaning And Types
00:11 Meaning
01:16 Expansion Strategy
03:47 Stability Strategy
04:52 Retrenchment Strategy
06:56 Summary
09:40 Lets Practice


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Category
Management
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