118 CHAPTER 6 THE CORE OF YOUR PLAN
GAMES PEOPLE PLAY
When you are developing your strategy, you must take careful account of how your
competitors will react. You will be unusually lucky if they sit placidly watching while you
gobble up their market share. You should expect them to be monitoring you, learning
from your mistakes and successes, examining your products and prices, and adapting
their strategy accordingly. After all, it’s what you are doing to them. Right?
Three defensive strategies
Strategy Action Consider pursuing if
Joint
ventures
and
mergers
Join forces
with
another
company
it will ease entry to a new market (perhaps overseas)
skills and competencies are complementary
additional resources are needed for a compelling project
additional might will help fight a larger competitor
Retrench Sell assets
and cut
costs
(previous!) managers have failed to implement a
successful strategy
you have failed to keep up with rapid growth
you have persistent low efficiency, low profitability, low
staff morale, etc.
you are swamped by competitors
Divest Sell a
whole
business
unit
the unit needs more resources or capital than you can
provide
the unit is dragging down the whole enterprise
the unit no longer fits into the required portfolio
threatened by monopoly laws
the sale is the only way to protect shareholders’ investments
the only alternative is bankruptcy
Strategies for non-profit organisations
It might appear that the strategies discussed here do not apply to many non-profit
organisations. Generally, government departments cannot diversify or merge,
charities cannot undercut competitors, and so on.
However, there are considerable opportunities – a social welfare department
might outsource job counselling, schools can focus on specific niches, medical care
organisations could sub-contract many activities.
Good strategic planning in non-profit organisations can enhance external
confidence (through better understanding, performance measurement and
accountability) and support requests for funding and other resources.
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