Strategic Management Planning and Growth Strategies

Every business has a strategy for surviving, growing and making profits. Strategy is making a choice out of several alternatives to survive, compete and grow in the business. It is linked with all those decisions that are crucial to an enterprise. It is also a plan to do something in the future that has a significant impact on the success and survival of a business enterprise. Ajay Piramal has taken several strategic decisions over time. His decision to move away from textile business and enter into pharmaceutical business is a strategy that has been very successful. His decision of starting pharmaceutical business through acquisition of Nicholas Laboratories is again a strategy. Th at he converted this company into a profit-making company in four years was a turnaround strategy. He decided to grow through acquisition, and then merging those acquired companies with Nicholas Piramal was also a strategy. Collaboration with a number of MNCs for Contract Research and Manufacturing services (CRAMS) is a collaborative strategy or strategic alliances. His decision to sell off his formulation business is a divestment strategy. Strategy formulation and implementation is part of strategic management. Strategic management has emerged as a discipline in itself. This shows the importance of strategy in today's business. Strategy and strategy formulation are part of top-management decision-making. The previous chapter showed that strategy and strategic decisions are part of strategic planning and come under the responsibility of top management. This chapter focuses on strategy, strategy formulation and implementation. There are three different levels of strategy — corporate, business and functional. Growth strategy, strategic alliances and divestment strategy are part of corporate-level strategy. If an enterprise is operating in more than one business, for each of these businesses the business strategies may be different. For instance, Reliance industry is operating in oil exploration and refinery, petro-chemicals, textile, retailing and life sciences. Growing and operating in all these business lines is a corporate-level strategy of a company. Competing in each of these business lines to have an edge over the others is a business level strategy. This chapter focuses on this aspect of strategy and strategic management