Strategic Management - Theme 3, 2025 PDF

ENCG - Casablanca Strategic Management Theme 3 Strategic Choices Corporate Strategy and Business Strategy S8/2025 Pr.Karim GASSEMI - ENCG - 1 Casablanca - 2025  PART I...

ENCG - Casablanca Strategic Management Theme 3 Strategic Choices Corporate Strategy and Business Strategy S8/2025 Pr.Karim GASSEMI - ENCG - 1 Casablanca - 2025  PART I Corporate Strategy Pr.Karim GASSEMI - ENCG - 3 Casablanca - 2025  Corporate Strategy ? « …. Refers to all projects and policies defining the growth and development modes of the company....» Michel Marchesnay, 2004 Corporate Strategy # Business Strategy Preliminary Corporate Strategy Business Strategy Pr.Karim GASSEMI - ENCG - 4 Casablanca - 2025 Corporate Strategy (Basic Questions 1/2) Question 1: How about the The business portfolio of the Entreprise ? Should we move towards DIVERSIFICATION of activities? Or, should we focus on some activities? (CONCENTRATE)/(RETRENCHMENT) Pr.Karim GASSEMI - ENCG - 5 Casablanca - 2025 Corporate Strategy (Basic Questions 2/2) Question 2: In which country, zone, region/Market are we going to settle next? Question 3: How will be the allocation of resources divided between different activities ? Question 4: How about the modalities of Growth? Pr.Karim GASSEMI - ENCG - 6 Casablanca - 2025  Basic Concepts of Diversification “….Diversification is a form of growth strategy. Growth strategies involve a significant increase in performance objectives beyond past levels of performance…” Michel Marchesnay, 2004 Pr.Karim GASSEMI - ENCG - 7 Casablanca - 2025  Basic Concepts of Diversification Level of Diversification Low Levels of Diversification Moderate Levels of Diversification A A A A B B C B C Single Dominant Related Partial Related Business Business linked Very High Levels of Diversification A B C A Strategic Business Units B C Pr.Karim GASSEMI - ENCG - Unrelated 8 Casablanca - 2025 Basic Concepts of Diversification Examples Core business: Low level of diversification Cement Factory Core business: Operating System Related business: Meduim level of diversification IT Applications Core business: Searching Engine Related business: High level of diversification Emails,/ AI etc…. Unrelated business: Cars – AI – Big Data… Pr.Karim GASSEMI - ENCG - Casablanca - 2025 9  How external growth is achieved? Merger and Acquisition; Simple or cross-shareholding; Strategic Alliance. Pr.Karim GASSEMI - ENCG - Casablanca - 2025 10  (Mergers and Acquisitions) Simplified Mechanism Merged companies Entreprise A Entreprise B Goals of the merged entity Capital and Finance Consolidation - Optimizing Workforce and Structures Organizational. Pr.Karim GASSEMI - ENCG - Casablanca - 2025 11  Strategic Alliance entreprise A Entreprise B Specific objectives Alliance Specific objectives Common objectives Group of Economic Joint Venture contractualization interests Joint creation Franchise Consortium Entreprise Pr.Karim GASSEMI - ENCG - Casablanca - 2025 12 Strategic Alliance Examples Joint Venture Pr.Karim GASSEMI - ENCG - Casablanca - 2025 13  Part II - Introduction to Business Strategy. - The basic concepts of Generic Strategies. Pr.Karim GASSEMI - ENCG - Casablanca - 2025 14  Porter’s generic strategies Advantage Advantage Target scope Low cost Product uniqueness Broad (industry wide) Cost leadership Differentiation strategy strategy Narrow (market wide) Focus strategy Focus strategy (low cost) (differentiation) Pr.Karim GASSEMI - ENCG - Ansoff Matrix Casablanca - 2025 15  Firms that succeed in cost leadership Firms that succeed in cost leadership have the following strengths: – Access to the capital required to make significant investment in fixed assets – Design skills for efficient manufacture – A high level of expertise in manufacturing process engineering – Efficient distribution channels Examples of cost leadership Pr.Karim GASSEMI - ENCG - Casablanca - 2025 17  Firms that succeed in a differentiation strategy Firms that succeed in a differentiation strategy have: – Have access to leading scientific research – A strong creative product development team – Strong sales team with the ability to successfully communicate the strengths of the product – Reputation for quality and innovation Examples of Differentiation Pr.Karim GASSEMI - ENCG - Casablanca - 2025 19  Focus strategy In a focus strategy the firm concentrates on one (or at most a limited number of) segments of the market The premise behind this strategy is that the needs of the group can be bettered served by focussing entirely on it The firm might feel more secure in the niche A focus strategy means that the firm’s efforts are not spread too thinly Focus strategies are: – Cost focus: cost leader in a particular segment – Focus differentiation: differentiation in the chosen segment Pr.Karim GASSEMI - ENCG - Casablanca - 2025 21  Focussed cost leadership To attract one type of customer with a low cost product To be the lowest cost operator in one particular niche segment of the market Pr.Karim GASSEMI - ENCG - Casablanca - 2025 22  Focussed differentiation A strategy that aims to attract one type of customer with a differentiated product It involves distinctiveness in one segment Aims to exploit unique position in a niche segment of the market Not the cheapest but the best or most distinctive in that segment Pr.Karim GASSEMI - ENCG - Casablanca - 2025 23  Multiple strategies Firms that are able to succeed at multiple strategies create separate business units for each strategy By separating the strategies into – Different units – Each with its own culture – Each with its own brands Pr.Karim GASSEMI - ENCG - Casablanca - 2025 24