Business Strategies

Divestiture Strategy

Selling a division or part of an organization is called divestiture. Divestiture strategy is often used to raise capital for further strategic acquisitions or investments. Divestiture strategy can be part of an overall retrenchment strategy to rid an organization of businesses that are unprofitable, that require too much capital, or that do not fit well with the firm’s other activities.

Divestment is a difficult decision for the management of any organization. The barriers that impede an organization from following a divestment strategy have been described as follows:

  • Structural (or Economic) Strategy. Characteristics of a business’s technology and its fixed and working capital impede exit, especially if the business is a core competence to the company.
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Business Turnaround Strategies

When a firm has experienced a serious decline in its market position, it is a candidate to mount an all-out effort to turn the firm around and improve its market position. Use of a turnaround strategy appears to be most appropriate when the firm’s decline is caused by internal actions such as improper strategy selection or poor implementation and execution of a workable. If the analysis indicates the firm’s present strategy is appropriate, then the problem is poor implementation. If the analysis indicates the firm’s present strategy is inappropriate, then the problem is improper strategy selection.

Turnaround strategies attempt to revitalize businesses in a slump.… Read the rest

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Business Growth Strategies

A growth strategy means increasing the level of the organization’s operations. This includes such popular measures as more revenues, more employees, and more of the market share. Growth can be achieved through direct expansion, a merger with similar firms, or diversification. Firms like Wal-Mart and McDonald’s have pursued a growth strategy by way of direct expansion. When Texaco absorbed Gulf Oil, it chose the merger route to growth. When Philip Morris bought General Foods, it was using diversification to achieve growth.

Business growth strategies seek greater size and the expansion of current operations. Wal-Mart is pursuing a highly aggressive growth strategy.… Read the rest

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Socially Responsible Strategies

A question of central interest here is, how can corporations formulate socially responsible strategies? How can companies assure that corporate domain choice strategies and competitive strategies are responsive to social needs and do not harm the public interest? There are two basic approaches to dealing with these questions.

First is to evaluate the social merits of each corporate and business strategy selected based on financial, technological, and market criteria. For each strategy, one could ask these questions: What social good does the strategy contribute? Does the strategy create any public risks or harm? Does the strategy harm the interests of our stakeholders?… Read the rest

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Case Study: Dell’s Competitive Advantage

Dell Computer is a leader in the e-commerce computer hardware market. It is an established brand that leads personal computer manufacturers both in U.S. sales and overall online sales. Its trademark method of selling products to customers, corporate and individual consumers, originates from the Dell Direct model, a Web-enabled infrastructure that allows customers to customize their PCs and order other products they need or desire. This virtual integration structure eliminates the need to manufacture everything, and instead uses the power of the Internet to share and exchange information with suppliers and vendors to build a truly superior supply chain that keeps inventory turnover low and costs to a minimum.… Read the rest

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Organization Structure to Control Systems Design

A major factor differentiates the automatic control system from the management control system, is the exercise of control by human beings in the latter case. In automatic control systems, the human element is missing. It is for this reason that an understanding of organization behavior is important for the proper perception of management control systems and processes. Further, as the major focus of the control system is on the performance evaluation of the organizational sub-units, the control system designer should also have an undemanding of the organization structure. Structure refers to the way the enterprise’s organized so as to enable the total task of the organization to be performed in an efficient and effective way.… Read the rest

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