Cost Reduction Strategies for a Company
A merger involves the unification of one or more companies. In most cases, for a low-profit company, such a strategy is the only possible option to avoid a complete closure of the business. Often, this policy is implemented in the form of a takeover, when an organization buys a controlling stake in a competing company in order to eliminate it from the market and seize its share. This usually happens without the consent of one of the parties, so this method of competitive struggle is not considered ethical. A merger, in itself, assumes the voluntary nature of the unification on the part of all participants in the transaction.
Bankruptcy is a risk physician database management strategy for an organization that has been in financial difficulties for a long time and is unable to pay off its debt obligations. The registration of such a status implies providing the company with a deferment on debt repayment, which allows it to optimize business processes and stabilize its work.
Liquidation is the final stage of an enterprise's life. It involves the complete withdrawal of existing assets, cessation of operations, and repayment of accounts payable. This strategy is appropriate in cases where the organization of new production is more profitable than any attempts to stabilize or restructure the current one.
It is important to remember that many of the long-term policies described above are multi-purpose and can be used equally effectively for growth and expansion of the company, as well as for stabilization and protection. For example, the strategies of diversification and reengineering can be used in any situation.
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Types of management strategies by functional activities of the organization
Management strategies can also be classified from the perspective of the functional types of enterprise activity. Let us consider each in detail.
The main goal of the product/production/product-market strategy is to identify specific products that will be produced, select sales markets for them, and determine the required production volume.
Technological development policy is based on the definition of methods that will be used in the production of products, calculation of capacity requirements, analysis of the competitiveness of selected technologies, and search for potential and opportunities for their development and improvement.
The strategy of selection and development of resources is aimed at determining the types of opportunities that will be used in the production and sale of goods, calculating the need for them, searching for alternatives for their use, selecting suppliers, monitoring the quality of supplied raw materials and materials, and studying opportunities for saving production stocks.
The innovation development policy develops the enterprise's activities in the field of innovation. The main objective of this strategy is to identify the company's divisions in which development will be carried out and to develop a detailed plan for the implementation of innovations.
Logistics policy helps to choose the optimal and least expensive routes for the delivery of raw materials and supplies to the enterprise to launch the production process, organize the delivery of finished products to points of sale and customers, and select the optimal methods for storing inventory.