Strategies Used By Organizations

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Strategies Used By Organizations by Mind Map: Strategies Used By Organizations

1. Growth and Diversification: It refers to the expanding of a company/organizations's operations to another area where they are not running.

1.1. Growth through concentration: It refers to the expanding of a company to another area within the same category that their business is focused at.

1.1.1. *Click on the arrow to view the image.*

1.1.2. Hero Honda - a motorcycle and scooter manufacturer in India - is known for the manufacturing and selling of two wheeled vehicles. They worked hard at promoting and selling their two wheeled vehicle without expanding out of their business category. Now, they are known for being the largest two wheeler manufacturer in India.

1.2. Growth through diversification: It is when a company purchases or invests in a completely different category of products/services than what they are focused on.

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1.2.2. Walt Disney is known for producing animated movies. Aside from that, they now also operate theme parks and own vacation properties in certain countries in the world.

1.3. Vertical integration: It is when a company is the own suppliers/distributors of their own company to fulfill company needs.

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1.3.2. Zara - a Spanish clothing and accessory company - designs, manufactures, and sells sixty percent of their own goods. They get to manage their inventory very efficiently and they get to take quick action when it comes to seasonal or fashion changes. People that uses vertical integration will be able to release their new line of goods in approximately three weeks whereas companies that depend on suppliers would have to publish their new line of goods in approximately nine months.

2. Restructuring and Divestiture: It is when a company monitors their growth and makes changes or adjustments based on their company performance.

2.1. Retrenchment strategy: It is when a company changes the way they are currently operating their business in order to get rid of their weaknesses for the better of their company in the future.

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2.1.2. Tesco decided to sell all of their 129 stores in Japan since they were not successful in making a presence in the highly competitive market.

2.2. Restructuring: It is when a company decides to reorganize their operations in order to achieve a high efficiency as well as have more time to plan for the future of their company.

2.2.1. *Click on the arrow to view the image.*

2.2.2. In 1981, British Airways had a chairperson who noticed that the company was not working efficiently and that they were wasting valuable resources. In order to save the company from their declining profits, he decided to restructure the entire organization by reducing the company's workforce.

2.3. Divestiture: It refers to selling parts of a company's least important business investments in order to keep the company's attention focused on the main objective of their business.

2.3.1. *Click on the arrow to view the image.*

2.3.2. PepsiCo Inc, expanded very quickly from the late 1970s to the mid 1990s by purchasing several non-core business lines. In the late 1990s, PepsiCo decided to sell some of them - such as Taco Bell, Pizza Hut, and KFC- so that they could maintain their focus on their beverages and snack food line.

2.4. Downsizing: It is the reducing of a company's operations in order to achieve a greater efficiency with reduced costs.

2.4.1. *Click on the arrow to view the image.*

2.4.2. General Motors had to cut the amount workers they had due to the dropping of their sales.

3. Global strategies:

3.1. Multi-domestic strategy: It is when a company make changes to their products and advertisements in order to fulfill the needs of their target consumers in certain areas/locations.

3.1.1. *Click on the arrow to view the image.*

3.1.2. A company that uses multi-domestic strategy is McDonalds. In India, cows are considered to be sacred and therefore McDonalds offers more chicken products.

3.2. Globalization strategy: It is a strategy where a company keeps their products and advertisement consistent in every country where they are operating.

3.2.1. *Click on the arrow to view the image.*

3.2.2. Apple is a company that uses globalization strategy. All their products remain constant in the international market.

3.3. Transnational strategy: It is basically the combination of multi-domestic strategy and globalization strategy. They make sure that their business around the world are running efficiently while also taking care of the needs of their consumers in their local area.

3.3.1. * Click on the arrow to view the image.*

3.3.2. Coca-Cola uses transnational strategy. The packaging maybe in a different language in order to fit the local language but the logo and the content of the drink remains the same in all the countries where the drink is being sold.

4. Co-operative strategy: It is when organizations cooperate with each other to achieve the same goal.

4.1. Strategic alliance: It refers to the joining of two companies to work together on the same area of interest.

4.1.1. *Click on the arrow to view the image.*

4.1.2. An example of a company that was successful with forming strategic alliances is Starbucks. Out of the many alliances they have formed, one of them was working together with PepsiCo in 1996 so that Starbucks could bottle, distribute, and sell their most popular drink i.e. the Frappucino.

5. E-Business Strategies: It is a strategy that involves the use of the internet for any business operations in order to make sure that the company is on top of their competitors.

5.1. B2B business strategy: It is where businesses communicate with each other regarding goods, services or any other information using the internet.

5.1.1. *Click on the arrow to view the image*

5.1.2. A few years back, American Express launched a site which they called 'Open Forum'. The company planned to use the site to give advice to small business owners. It has become very successful and the most favoured section in the site is called 'Idea Hub'. It is a forum where members communicate and share their ideas to each other as well as to industry experts.

5.2. B2C business strategy: It is the strategy where businesses are directly connected to their consumers through the internet.

5.2.1. *Click on the arrow to view the image.*

5.2.2. Amazon is known to be one of the best companies that uses a B2C strategy through the web. Amazon sells almost anything and they also allow third parties to sell their product on their website. Every transaction between the buyer and seller is done online. Amazon has successfully achieved their goal of making consumers around the world recognize them through their online business and has also successfully established themselves as a great example of a company that uses B2C strategy.