Corporate Level Strategy

Prf. Aslam Logade

Corporate Level Strategy :

Action taken by Corporate In order to gain competitive advantages Through product a mixture of business and

In order to competing in industries and product market

several

TATA GROUP DIVERSIFICATION

HOTELS STEEL AUTOMOBILE POWER IT RETAIL CHEMICALS

: : : : : : :

TAJ GROUP TATA STEEL TATA AUTO TATA POWER TCS MORE TATA CHEMICALS

REVENUE DISTRIBUTION FOR TATA GROUP :

Level of Diversification:
1.Low Level : Focus on single or dominant business. Ex Wrigley Company generate revenue 95% of the total sales from chewing gum market. 2. Moderate to High Level A. Related Diversification : 70% revenue from dominant business and business shared product, technology and distribution linkage.

TATA MOTOR

TATA STEEL

TATA FOUNDRY

TATA example .. Tata Motor and Tata Steel , Tata Foundry Related Diversification

C. High Level Of Diversification: Unrelated : Less than 70% of revenue comes from dominant business and no link between other business

Reason for Diversification:

RELATED DIVERSIFICATION :

Motives to enhance strategic competitiveness. Economy of Scope : Cost saving attributed to transferring the capabilities and competencies developed in one business to new business. Use of Tangible and intangible resources Market Power : When firm is able to sell its products above existing competitive level or reduce the cost of its primary and support activity. ex.. Two or more firm compete in same area or geographic market. Tata Power,Mobile Vs. Reliance Energy, Mobile Vertical Integration: [Foreword and Backword ] When company is producing its own inputs or its own source of output.

UNRELATED DIVERSIFICATION :
1. Financial Economies:
Allocation of Financial resources based on investment inside and outside the firm

2. Restructuring: Focuses exclusively on buying and selling other firms assets in the external market. Selling underperforming division & restructuring another business.

Diversification Incentives & Resource

Incentives to Diversify :

A. Antitrust regulation : Govt. Policies and tax laws

B. Uncertain future cash flow:

C. Risk Reduction

D. Resources available tangible and intangible

Seven S Model of Implementation

STRATEGY SKILLS
STRUCTURE

SHARED VALUES

STAFF

SYSTEMS

STYLE

7s Strategy :

Strategy Plan or course of action leading to the allocation of firms resources to reach identified goals. Structure The ways people and tasks relate to each other. The basic grouping of reporting relationships and activities. The way separate entities of an organization are linked. Shared Values The significant meanings or guiding concepts that give purpose and meaning to the organization.

Systems Formal processes and procedures, including management control systems, performance measurement and reward systems, and planning and budgeting systems, and the ways people relate to them. Skills Organizational competencies, including the abilities of individuals as well as management practices, technological abilities, and other capabilities that reside in the organization.

Style The leadership style of management and the overall operating style of the organization. A reflection of the norms people act upon and how they work and interact with each other, vendors, and customers. Staff Recruitment, selection, development, socialization, and advancement of people in the organization

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