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It focuses on fine-tuning its business operations and improving functional efficiencies through better deployment of resources.

In other words, a firm is said to follow stability/ consolidation strategy if: Adopting a stability strategy does not mean that a firm lacks concern for business growth.

There are various approaches to developing stability/consolidation strategy.

The Management has to select the one that best suits the corporate objective. In all these approaches, the fundamental course of action remains the same, but the circumstances in which the firms choose various options differ.

However, small firms find this a very useful approach since they can reduce their risk and defend their positions by adopting this strategy.

Niche players also prefer this strategy for the same reasons.

This alternative may be appropriate in two situations: (a) the need for an opportunity to rest, digest, and consolidate after growth or some turbulent events - before continuing a growth strategy, or (b) an uncertain or hostile environment in which it is prudent to stay in a “holdingpattern” until there is change in or more clarity about the future in the environment.

With a holding strategy the company continues at its present rate of development. Although growth is not pursued as such, this will occur if the size of the market grows.

They would prefer to adopt the existing product-market posture and avoid departing from it.

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