chapter6_strategy_formulation第六章战略制定.ppt

Retrenchment strategy Divestment strategy Weak competitive position Unable to pull itself up by its bootstraps Can not be a captive company Obtain a good price for its shareholders Bankruptcy or liquidation strategy Give up management of the firm to the courts in return for some settlement of the corporation’s obligations. Liquidation is piecemeal sale of all of the firm’s assets. Portfolio analysis In portfolio analysis, top management views its product lines and business units as a series of investments from which it expects a profitable return. Theoretical base Experience curve Product life cycle BCG matrix provides a framework for senior management in allocating resources across business units in a diversified firm by Balancing cash flows among business units, and Balancing stages in the product life-cycle (PLC) BCG Product Portfolio Matrix Dimensions horizontal axis is the relative market share Defined as its market share in the industry divided by that of largest other competitor. In vertical axis, 10% line represents high growth rates Strategic Perspectives of Products in Different Quadrants Four different strategic perspectives Investment Earnings Cash-flow Strategy Implications Question Marks (Problem Children) Investment—heavy initial capacity expenditures and high RD costs Earnings—negative to low Cash-flow—negative (net cash user) Strategy Implications If possible to dominate segment, go after share. If not, redefine the business or withdraw Stars Investment—continue to invest for capacity expansion Earnings—Low to high earnings Cash-flow—Negative (net cash user) Strategy Implications Continue to increase market share—even at the expense of short-term earnings Cash Cows Investment—Capacity maintenance Earnings—High Cash-flow—Positive (net cash contributor) Strategy Implications Maintain market share and cost leadership until further investment becomes marginal Dogs Investment—Gradually reduce capacity Earnings—High to low Cash-flow—Positive (net