Strategic management Assignment Example | Topics and Well Written Essays - 2000 words

Strategic counseling - Assignment ExampleCorporate strategy is basically about finding ways to generate nurture when different suck ups of business under the equivalent company pool their resources. How can diversifying the unified operations or launching into a new line of business assist the company in competing with other businesses? variegation Strategy Diversification strategies are employed to develop a companys operations by adding products, markets, performance stages or services to the existing business. The aim of corporate variegation is to permit the business to put down in lines of business that are not the same as those in their current operations. Concentric variegation is descriptive of when the new business is strategically connected to the present lines of business. Conglomerate diversification, on the other hand, is descriptive of the situation when there is no familiarity or link between the old and new lines of business. Development strategies usually res ult in a considerable increase in market share or gross revenue objectives past previous levels of organizational performance (Gerami 2010). Many business establishments pursue different growth strategies on a regular basis. One of the main reasons for this is the fact that most business executives consider that greater investment will result in even bigger results. Increases in sales are frequently utilise as a measure for organizational performance. Even if the business profits stay constant or start to decrease, sales increases usually satisfy many organizational representatives. The presumption is usually made among corporate executives that increases in sales sooner or later result in large profits. Vertical diversification Diversification strategies are usually categorized according to the direction that the diversification takes (Cameron and Quinn 2011). Vertical integration is descriptive of when corporations take on new business functions at diverse stages of the manufact uring surgical procedure. Participation in the different levels of production can be initiated by procuring a different company (external diversification), or within the corporation (internal diversification). In the horizontal variety of diversification, or integration, the corporation basically moves into new corporate operations at the same level of manufacture. Vertical integration is normally associated with existing business functions and is perceived as being a form of concentrical diversification. Horizontal integration, on the other hand, is presumed to be a conglomerate or concentric variety of diversification. Vertical Integration The steps that a manufactured commodity passes through in the process of being varyd from being a raw material to being a finished product pay off for use by the consumer make up the assorted stages of manufacture (Lumby and Jones 2004). When a corporation diversifies when on a level where it is closer to the level where raw materials are ha ndled in the production stages, it is said to be winning the route of the strategy of backward vertical integration. Avon is an example of a company that deals in cosmetics. Its main line of business has been in presenting its products to customers on a door-to-door basis (Robertson and Caldart 2009). Some years ago, Avon decided to change its strategy. It basically followed a backward type of vertical integration when it started experimenting with different substances and