Generic Estrategics

GENERIC STRATEGIES
Grand or Generic strategies refers to the level of corporate or global strategies.
1) Growth strategies are those that are directed toward the development of products andthe company's traditional markets. They are based on growth in one line, maintaining a close relationship with the company's current situation. Therefore, strategies are usually developed using thesame technical, financial and commercial used for initial product line. Major expansion strategies are market penetration, product development, and market development.
This strategy has been used indifferent industries like food & service (Pizza Hut), real estate, financial services (Western Union), insurance (Allstate) and others.
2) Retrenchment strategies are those used to reduce eitherthe size or the diversification of the company. The reason of the decision is often related to cut expenses. However, sometimes the decision is related to business decision.
The Cisco decision to shutdown Flip Camcorders can exemplify an example of this type of strategy.
3) Stability strategies mean continuing the same line of business with the manufacture of the same goods or provision ofthe same services offered in the same market segments in which it is acting for the same customers. It is clear the aim of the strategy is the stability of the company.
For instance, this kind ofstrategy is applied by many small grocery stores.
4) Diversification strategies are those in which the company simultaneously adds new products into new markets. This access to new activities,whether for internal or external growth enables the company to operate in new competitive environments. As a result there are some physical and organizational changes affecting the structure of thecompany. Is important to stress that diversification can be either related or not related.
For example, some oil companies have oil fields, refineries, transportation companies and gas stations.
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