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Strategic Management

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Strategic Management ­ MGT603
VU
Lesson 29
GRAND STRATEGY MATRIX
Learning objective
Grand strategy matrix is a last matrix of matching strategy formulation framework. It same as important
as BCG, IE and other matrices. This chapter enables you to understand the preparation of GS matrix.
This chapter also enables you to understand the last stage (decision stage) of strategy formulation frame
work and also explain that how it is prepared
Grand Strategy Matrix
This is also an important matrix of strategy formulation frame work. Grand strategy matrix it is popular
tool for formulating alternative strategies. In this matrix all organization divides into four quadrants.
Any organization should be placed in any one of four quadrants. Appropriate strategies for an
organization to consider are listed in sequential order of attractiveness in each quadrant of the matrix.
It is based two major dimensions
1. Market growth
2. Competitive position
All quadrant contain all possible strategies
RAPID MARKET GROWTH
Quadrant I
Quadrant II
Market development
Market development
Market penetration
Market penetration
Product development
Product development
Forward integration
Horizontal integration
Backward integration
Divestiture
Horizontal integration
Liquidation
Concentric diversification
WEAK
STRONG
COMPETITIVE
COMPETITIVE
POSITION
POSITION
Quadrant IV
Quadrant III
Concentric diversification
Retrenchment
Horizontal diversification
Concentric diversification
Conglomerate diversification
Horizontal diversification
Joint ventures
Conglomerate diversification
Liquidation
SLOW MARKET GROWTH
Qurdant-1 contains that company's strong having competitive situation and rapid market growth.
Firms located in Quadrant I of the Grand Strategy Matrix are in an excellent strategic position. These
firms must focus on current market and appropriate to follow market penetration, market development
and products development are appropriate strategies.
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Strategic Management ­ MGT603
VU
Qurdant-2 contains that company's having weak competitive situation and rapid market growth. Firms
positioned in Quadrant II need to evaluate their present approach to the marketplace seriously.
Although their industry is growing, they are unable to compete effectively, and they need to determine
why the firm's current approach is ineffectual and how the company can best change to improve its
competitiveness. Because Quadrant II firms are in a rapid-market-growth industry, an intensive strategy
(as opposed to integrative or diversification) is usually the first option that should be considered.
Qurdant-3 contains that company's weak competitive situation and slow market growth. The firms fall
in this quadrant compete in slow-growth industries and have weak competitive positions. These firms
must make some drastic changes quickly to avoid further demise and possible liquidation. Extensive
cost and asset reduction (retrenchment) should be pursued first. An alternative strategy is to shift
resources away from the current business into different areas. If all else fails, the final options for
Quadrant III businesses are divestiture or liquidation.
Qurdant-4 contains that company's strong competitive situation and slow market growth. Finally,
Quadrant IV businesses have a strong competitive position but are in a slow-growth industry. These
firms have the strength to launch diversified programs into more promising growth areas. Quadrant IV
firms have characteristically high cash flow levels and limited internal growth needs and often can
pursue concentric, horizontal, or conglomerate diversification successfully. Quadrant IV firms also may
pursue joint ventures
As above figure there are four quadrants in grand matrix that further contain various set strategies.
Quardrant-1
Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification
Quardrant-2
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
Quardrant-3
Retrenchment
Concentric diversification
Horizontal diversification
Conglomerate diversification
Liquidation
Quardrant-4
Concentric diversification
Horizontal diversification
Conglomerate diversification
Joint ventures
108
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Strategic Management ­ MGT603
VU
Conclusion
Every firm fall any one four quadrants and if the firm fall in quadrant-1 it must follow the list of
strategies given in it. As further if the firm falls in quarrant-2 must adopt the strategies given in
quadrant-2 and so on
109
Table of Contents:
  1. NATURE OF STRATEGIC MANAGEMENT:Interpretation, Strategy evaluation
  2. KEY TERMS IN STRATEGIC MANAGEMENT:Adapting to change, Mission Statements
  3. INTERNAL FACTORS & LONG TERM GOALS:Strategies, Annual Objectives
  4. BENEFITS OF STRATEGIC MANAGEMENT:Non- financial Benefits, Nature of global competition
  5. COMPREHENSIVE STRATEGIC MODEL:Mission statement, Narrow Mission:
  6. CHARACTERISTICS OF A MISSION STATEMENT:A Declaration of Attitude
  7. EXTERNAL ASSESSMENT:The Nature of an External Audit, Economic Forces
  8. KEY EXTERNAL FACTORS:Economic Forces, Trends for the 2000ís USA
  9. EXTERNAL ASSESSMENT (KEY EXTERNAL FACTORS):Political, Governmental, and Legal Forces
  10. TECHNOLOGICAL FORCES:Technology-based issues
  11. INDUSTRY ANALYSIS:Global challenge, The Competitive Profile Matrix (CPM)
  12. IFE MATRIX:The Internal Factor Evaluation (IFE) Matrix, Internal Audit
  13. FUNCTIONS OF MANAGEMENT:Planning, Organizing, Motivating, Staffing
  14. FUNCTIONS OF MANAGEMENT:Customer Analysis, Product and Service Planning, Pricing
  15. INTERNAL ASSESSMENT (FINANCE/ACCOUNTING):Basic Types of Financial Ratios
  16. ANALYTICAL TOOLS:Research and Development, The functional support role
  17. THE INTERNAL FACTOR EVALUATION (IFE) MATRIX:Explanation
  18. TYPES OF STRATEGIES:The Nature of Long-Term Objectives, Integration Strategies
  19. TYPES OF STRATEGIES:Horizontal Integration, Michael Porterís Generic Strategies
  20. TYPES OF STRATEGIES:Intensive Strategies, Market Development, Product Development
  21. TYPES OF STRATEGIES:Diversification Strategies, Conglomerate Diversification
  22. TYPES OF STRATEGIES:Guidelines for Divestiture, Guidelines for Liquidation
  23. STRATEGY-FORMULATION FRAMEWORK:A Comprehensive Strategy-Formulation Framework
  24. THREATS-OPPORTUNITIES-WEAKNESSES-STRENGTHS (TOWS) MATRIX:WT Strategies
  25. THE STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX
  26. THE STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX
  27. BOSTON CONSULTING GROUP (BCG) MATRIX:Cash cows, Question marks
  28. BOSTON CONSULTING GROUP (BCG) MATRIX:Steps for the development of IE matrix
  29. GRAND STRATEGY MATRIX:RAPID MARKET GROWTH, SLOW MARKET GROWTH
  30. GRAND STRATEGY MATRIX:Preparation of matrix, Key External Factors
  31. THE NATURE OF STRATEGY IMPLEMENTATION:Management Perspectives, The SMART criteria
  32. RESOURCE ALLOCATION
  33. ORGANIZATIONAL STRUCTURE:Divisional Structure, The Matrix Structure
  34. RESTRUCTURING:Characteristics, Results, Reengineering
  35. PRODUCTION/OPERATIONS CONCERNS WHEN IMPLEMENTING STRATEGIES:Philosophy
  36. MARKET SEGMENTATION:Demographic Segmentation, Behavioralistic Segmentation
  37. MARKET SEGMENTATION:Product Decisions, Distribution (Place) Decisions, Product Positioning
  38. FINANCE/ACCOUNTING ISSUES:DEBIT, USES OF PRO FORMA STATEMENTS
  39. RESEARCH AND DEVELOPMENT ISSUES
  40. STRATEGY REVIEW, EVALUATION AND CONTROL:Evaluation, The threat of new entrants
  41. PORTER SUPPLY CHAIN MODEL:The activities of the Value Chain, Support activities
  42. STRATEGY EVALUATION:Consistency, The process of evaluating Strategies
  43. REVIEWING BASES OF STRATEGY:Measuring Organizational Performance
  44. MEASURING ORGANIZATIONAL PERFORMANCE
  45. CHARACTERISTICS OF AN EFFECTIVE EVALUATION SYSTEM:Contingency Planning