Business Strategy Strategic Alternatives Strategic Alternatives - - PowerPoint PPT Presentation

Business Strategy

Nikolaos Karanasios

Assistant Professor CEO of the Serres Business & Innovation Centre

07

Strategic Alternatives Strategic Alternatives

• A team of «investors» decides to found a new company.
• Among the investors may also be «legal entities» / «Legal

persons».

• The investors assume the risk of loosing their money, wishing

for success.

CREATION CREATION

EXPANSION EXPANSION

• Geographinc expansion.
• Addition of new products and / or Sevices.
• Addition of new «subjects».
• Horizontal Integration.
• Vertical Integration.
• Total (diagonal) Integration.

DEVELOPMENT DEVELOPMENT

• Increment og the Market Share.
• Improvement of the Effectiveness (profitability).
• Improvent of dealing with risks.
• Improvement of cash-flows.

DIVERSIFICATION DIVERSIFICATION

• Change of products / services Line.
• Change of the Target Market.
• Change of the Financial Sources
• Change of «partners» (distributors, Research & Development,

Accounting etc).

• Changes of individual characteristics of products, are NOT

strategic diversification.

MOVEMENT - REDEPLOYMENT MOVEMENT - REDEPLOYMENT

• Change of company headqarters.
• Changes of the Production (even the country) of production and

sales.

• Changes of premises type.
• Near translocation.

RESTRUCTURE / REENGINEER RESTRUCTURE / REENGINEER

• Add / Stop Functions.
• New Segmentation of Functions.
• New Structure approach (from functions to processes).
• Change of the Organization Chart (communication between

profit / cost segments).

SHRINK SHRINK

• Abbandonement of geographic territories.
• Ceasing the offer of product / service Line.
• Replacement of function with out-sourcing.
• Decrement of Capital.

ACQUISITION ACQUISITION

• Friendly Acquisition (the owners of the company agree to sell

it).

• Aggressive acquisition (The majority owners of the company

shares are being bought at the Stock Exchange Market.

• Buy-out of enough capital for a management control.

MERGER

• Two or more companies are joined, loosing their autonomy.
• Participation in a group of companies, maintaining their

autonomy.

• Transfer of Capital Ownership to an Equity participations

company [Holding].

DEMERGER / SPLIT DEMERGER / SPLIT

• Division of a Group in its components – they regain autonomy.
• Division of a company and transformation to a group.
• Division of a company and transformation to a Holding.

DISSOLUTION DISSOLUTION

• Divestment. Sell-out of the assets and restitution of capital to

the shareholders.

• Bankruptcy procedure.
• Buying of own shares.
• Liquidation.

DISCONTINUE DISCONTINUE

• Stopping of productive and commercial operations, but

continuing to pay dues and collect from clients.

• Dormant (after settlement of Tax and Social Security depts).

The company may restart without new foundation.

STOP STOP

• Abbandonement of all assets – after settlement of all depts.
• Abbandonement of Management. There are no candidates

among the shareholders.

LEGAL FORM RESTRUCTURE LEGAL FORM RESTRUCTURE

• Change from partnership to Capital ownership (Lim, Ltd, Corp.,
• Inc. S.A., GmbH, etc).
• Transformation to European Company.
• Transformation to European Cooperative.
• Transformation from Company to Cooperative or vice-versa.

GENERATION GENERATION

• Creation of an affiliate without other share-holders.
• Creation of an affiliate together with other natural or legal

persons.

• Creation of a company together with ex staff memers (Spin

Out).

• Creation of a company together with Researchers (spin off).

SALE SALE

• Sale of an entire company to another, a Group or a Holding.
• Sale of a part of a company to another.
• Sale of Shares to other investors.

ALLIANCE ALLIANCE

• Participation in a Group of companies.
• Participation in an Alignement (cluster).
• Exchange of shares between companies (not investors) of the

same sector.

• Exchange of shares for the risk dispersion.
• Common undertaking of works (joint venture).

It is Not Strategy: It is Not Strategy:

• Diversification of a product or a service.
• Change of the Marketing Mix.
• Change of the policy about human Resources.
• The renegotiation of Credits / Depts.