Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.

1. Corporate Level Strategies

2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

4. Intensification strategies

5. Market penetration
• Market penetration
involves trying to gain
additional share of a
firm’s existing
markets using existing
products. Often firms
will rely on advertising
to attract new
customers with
existing markets.

6. Examples of Market penetration
• Nike features famous
athletes in print and
television ads
designed to take
market share within
the athletic shoes
business from Adidas
and other rivals.

7. Examples of Market penetration
• McDonald’s has pursued
market penetration in recent
years by using Latino themes
within some of its
advertising. The firm also
maintains a Spanish-
language website at
http://www.meencanta.com
; the website’s name is the
Spanish translation of
McDonald’s slogan “I’m
lovin’ it.” McDonald’s hopes
to gain more Latino
customers through initiatives
such as this website.

8. Market Development
• Market development
involves taking existing
products and trying to
sell them within new
markets.

9. Examples of Market Development
• One way to reach a new market is
to enter a new retail channel.
Starbucks has stepped beyond
selling coffee beans only in its
stores and now sells beans in
grocery stores. This enables
Starbucks to reach consumers that
do not visit its coffeehouses.

10. Examples of Market Development
• Entering new geographic areas is another
way to pursue market development.
Philadelphia-based Tasty Baking Company
has sold its Tastykake snack cakes since
1914 within Pennsylvania and adjoining
states. Now it is extensively distributing
Tastykake’s products within the
southeastern United States. Displaced
Pennsylvanians in the south rejoiced.

11. Product Development
• Product development
involves creating new
products to serve
existing markets.

12. Examples of Product Development
• In the 1940s, for example,
Disney expanded its
offerings within the film
business by going beyond
cartoons and creating movie
featuring real actors.

13. Examples of Product Development
• Coca-Cola and Pepsi regularly
introduce new varieties—
such as Coke Zero and Pepsi
Cherry Vanilla—in an attempt
to take market share from
each other and from their
smaller rivals.

14. Integration strategies

15. Vertical Integration
• When pursuing a vertical
integration strategy, a
firm gets involved in new
portions of the value
chain. This approach can
be very attractive when a
firm’s suppliers or buyers
have too much power
over the firm and are
becoming increasingly
profitable at the firm’s
expense.

16. Examples of Vertical Integration
• Oil companies like
ConocoPhillips can be
involved in all stages of
the value chain, including
crude oil exploration,
drilling for oil, shipping oil
to refineries, refining
crude oil into products
such as gasoline,
distributing fuel to gas
stations, and operating
gas stations.

17. Forward Integration
• When pursuing a vertical
integration strategy, a
firm gets involved in new
portions of the value
chain. This approach can
be very attractive when a
firm’s suppliers or buyers
have too much power
over the firm and are
becoming increasingly
profitable at the firm’s
expense.

18. Examples of Forward Integration
• Disney has pursued
forward vertical
integration by operating
more than three hundred
retail stores that sell
merchandise based on
Disney’s characters and
movies. This allows
Disney to capture profits
that would otherwise be
enjoyed by another store.

19. Backward Integration
• When pursuing a vertical
integration strategy, a
firm gets involved in new
portions of the value
chain. This approach can
be very attractive when a
firm’s suppliers or buyers
have too much power
over the firm and are
becoming increasingly
profitable at the firm’s
expense.

20. Examples of Backward Integration
• Ford Motor Company
created subsidiaries that
provided key inputs to
vehicles such as rubber,
glass, and metal. This
approach ensured that
Ford would not be hurt by
suppliers holding out for
higher prices or providing
materials of inferior
quality.

21. Horizontal Integration
• It is a type of
integration strategies
pursued by a company
in order to strengthen
its position in the
industry. A corporate
that implements this
type of strategy usually
mergers or acquires
another company that
is in the same
production stage.

22. Example of Horizontal Integration
• One example of
horizontal integration
is what happened
between the
infamous Daimler
Benz and Chrysler
merger (car
developing,
manufacturing and
retailing).

23. Acquisition
• An acquisition takes
place when one
company purchases
another company.
Generally, the
acquired company is
smaller than the firm
that purchases it.

24. Examples of Acquisition
• Disney was much
bigger than Miramax
and Pixar when it
joined with these
firms in 1993 and
2006, respectively,
thus these two
horizontal integration
moves are considered
to be acquisitions.

25. Merger
• A merger is a combination
of two or more
organizations in which one
acquires the assets and
liabilities of the other in
exchange for shares or
cash or both the
organization are dissolved
and the assets and
liabilities are combined
and new stock is issued.

26. Examples of Merger
• Big oil got even bigger in
1999, when Exxon and
Mobil signed a $81
billion agreement to
merge and form Exxon
Mobil. ExxonMobil
remains the strongest
leader in the oil market,
with a huge hold on the
international market and
dramatic earnings.

27. Strategic Alliance
• A strategic alliance is a
cooperative arrangement
between two or more
organizations that does
not involve the creation
of a new entity.

28. Examples of Strategic Alliance
• In June 2011,Twitter
announced the formation
of a strategic alliance with
Yahoo! Japan. The alliance
involves relevant Tweets
appearing within various
functions offered by
Yahoo! Japan.

29. Diversification strategies
• Firms using diversification
strategies enter entirely new
industries. While vertical
integration involves a firm
moving into a new part of a
value chain that it is already is
within, diversification
requires moving into new
value chains.

30. Examples of Diversification strategies
• Avon's move to market
jewellery through its
door-to-door sales force
involved marketing new
products through
existing channels of
distribution.

31. Diversification strategies

32. Concentric Diversification
• When an organization takes up
an activity in such a manner
that is related to the existing
business definition of one or
more of firms businesses, either
in terms of customer groups,
customer’s functions or
alternative technologies, it is
called concentric diversification.

33. Example of Concentric Diversification
• The addition of tomato
ketchup and sauce to the
existing "Maggi" brand
processed items of Food
Specialities Ltd. is an
example of technological-
related concentric
diversification

34. Conglomerate Diversification
• When an organization adopts a
strategy which requires taking of
those activities which are
unrelated to the existing
businesses definition of one or
more of its businesses either in
terms of their respective customer
groups, customer functions or
alternative technologies, it is called
conglomerate diversification.

35. Examples of Conglomerate Diversification
• Example of Indian company
which have adopted apart
of growth and expansion
through conglomerate
diversification the classic
examples is of ITC, a
cigarette company
diversifying into the hotel
industry.

36. International Expansion

37. Export
• Exporting is an effective
entry strategy for
companies that are just
beginning to enter a
new foreign market. It’s
a low-cost, low-risk
option compared to the
other strategies.

38. Imports
• Importing is the
flipside of exporting.
Importing refers to
buying goods and
services from foreign
sources and bringing
them back into the
home country.

39. Licensing
Licensing is another way
to enter a foreign market
with a limited degree of
risk. Under international
Licensing, a firm in one
country permits a firm in
another country to use
its intellectual property(
Patents, trade marks
etc).

40. Example of Licensing
• Examples of licenses
include a company using
the design of a popular
character, e.g. Mickey
Mouse, on their
products.

41. Franchising
Franchising is a business
model in which many
different owners share a
single brand name. A
parent company allows
entrepreneurs to use the
company's strategies and
trademarks; in exchange,
the franchisee pays an
initial fee and royalties
based on revenues.

42. Example of Franchise
• Examples of franchises
include McDonalds,
Subway, 7-11 and Dunkin
Donuts.

43. Joint Ventures
An equity joint venture is
a contractual, strategic
partnership between two
or more separate
business entities to
pursue a business
opportunity together.

44. Example of Joint Ventures
Sony-Ericsson is a joint
venture by the Japanese
consumer electronics
company Sony Corporation
and the Swedish
telecommunications
company Ericsson to make
mobile phones.

45. Stability strategies

46. Stability strategies
Stability strategy is a
strategy in which the
organization retains its
present strategy at the
corporate level and
continues focusing on its
present products and
markets.

47. Examples of Stability strategies
Steel Authority of India has
adopted stability strategy
because of over capacity in
steel sector. Instead it has
concentrated on increasing
operational efficiency of its
various plants rather than
going for expansion. Others
industries are ‘heavy
commercial vehicle’, ‘coal
industry’.

48. Examples of Stability strategies
Cigarette, liquor industries
fall in this category because
of strict control over
capacity expansion. Both
these industries require
license under the provisions
of Industries (Development
and regulations) Act, 1951.

49. Pause/ Proceed with Caution Strategy
It is employed by the firm
that wish to test the ground
before moving ahead with a
full fledged grand strategy,
or by firms that have an
intense pace of expansion
and wish to rest for a while
before moving ahead

50. Example
• In the India shoe market
dominated by Bata and Liberty,
Hindustan Levers better known
for soaps and detergents,
produces substantial quantity
of shoes and shoe uppers for
the export market. In late 2000,
it started selling a few
thousand pairs in the cities to
find out the market reaction.
This is a pause proceed with
caution strategy before it goes
full steam into another FMCG
sector that has a lot of
potential

51. No-Change Strategy
It is a conscious decision to
do nothing new. The firm
will continue with its
present business definition.
When a firm has a stable
internal and external
environment the firm will
continue with its present
strategy.

52. Profit Strategy
• A profit strategy is one that
capitalizes on a situation in which
old and obsolete product or
technology is being replaced by a
new one. This type of strategy does
not require new investment, so it is
not a growth strategy. Firms
adopting this strategy decide to
follow the same technology, at least
partially, while transiting into new
technological domains.

53. Examples of Profit Strategy
• Sylvania, RCA, and GE are
among the firms that
followed this strategy. They
decided to stay in the
vacuum tube market until
the “end of the game.”

54. Retrenchment Strategies

55. Retrenchment strategy
• A retrenchment grand strategy is
followed when an organization
aims at a contraction of its
activities through substantial
reduction or the elimination of
the scope of one or more of its
businesses in terms of their
respective customer groups,
customer functions, or alternative
technologies either singly or
jointly in order to improve its
overall performance.

56. Examples of Retrenchment strategy
• General Motors of the
United States stopped
producing a number of
"makes" of automobile. GM
decided that it needed to
retrench by concentrating
on just a few "makes." It
hoped this would help it
return to profitability.

57. Turnaround strategies
• Turn around strategies derives
their name from the action
involved that is reversing a
negative trend. There are
certain conditions or indicators
which point out that a
turnaround is needed for an
organization to survive. An
organization which faces one or
more of these issues is referred
to as a ‘sick’ company.

58. Turnaround strategies
• There are three ways in which
turnarounds can be managed
– The existing chief executive and
management team handles the
entire turnaround strategy with
the advisory support of a
external consultant.
– In another case the existing
team withdraws temporarily
and an executive consultant or
turnaround specialist is
employed to do the job.
– The last method involves the
replacement of the existing
team specially the chief
executive, or merging the sick
organization with a healthy one.

59. Examples of Turnaround strategies
• Xerox revealed a
Turnaround Programme in
December 2000, which
included cutting $1 billion in
costs, and raising up to $4
billion through the sale of
assets, exiting non-core
businesses and lay-offs.
Subsequently, in August
2001, Mulcahy was made
CEO. Xerox continued to
report losses in 2001, but it
returned to profit in 2002
and continued to report
profits in 2003.

60. Divestment strategy
• A divestment strategy
involves the sale or
liquidation of a portion of
business, or a major
division.

61. Divestment strategy
• TATA group is a highly diversified entity
with a range of businesses under its
fold. They identified their non – core
businesses for divestment. TOMCO
was divested and sold to Hindustan
Levers as soaps and a detergent was
not considered a core business for the
Tatas.

62. Liquidation Strategy
• A retrenchment strategy
which is considered the most
extreme and unattractive is
the liquidation strategy,
which involves closing down
a firm and selling its assets. It
is considered as the last
resort because it leads to
serious consequences such
as loss of employment for
workers and other
employees, termination of
opportunities where a firm
could pursue any future
activities and the stigma of
failure.

63. Examples of Liquidation Strategy
• JC Penney recently sold its
Eckerd chain of drugstores to
focus on the corporation’s core
business of department stores
and Internet and catalog sales.
Studies show that between 33
per cent and 50 per cent of all
acquisitions are later divested.