Chapter 17: Strategic planning - a second look at the basic options
Overview
This chapter aims to provide another way of looking at strategic options, which is related to the nature of the action instead of the source from which it is derived. Seven major options are explored in some depth: divestment (including outsourcing), obtaining licences, giving licences, various expansion methods, research and development, acquisition and merger, and strategic alliances. The value and difficulties of the approaches are explored. Practical guidance is given to help improve the chances of success if the option is chosen.
In Chapter 14 there was a considerable discussion of the matrix (Figure 14.3) into which most strategic alternatives could be fitted. Within each sector of this matrix there are many actions that can be initiated, and these may be classified under a second list of headings on which discussion should now be turned. These are:
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| hiring staff partnership broking 'piggy-backing' operation contract production selling own services |
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Divestment
A decision to give up a particular sphere of activity may be very difficult to make. There are often emotional or prestige reasons for wishing to continue: a dislike of admitting failure, an unpleasantly high loss to be faced in one year, problems of employee morale, and, above all, a sneaking feeling that someone else might pick up the divested area and make a success of it. For a chief executive this may be like advertising personal...