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Lesson#29

GRAND STRATEGY MATRIX-1

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

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.

Quadrant II

Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation

Quadrant I

Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification

Quadrant III

Retrenchment
Concentric diversification
Horizontal diversification
Conglomerate diversification
Liquidation

Quadrant IV

Concentric diversification
Horizontal diversification
Conglomerate diversification
Joint ventures

STRONG
COMPETITIVE
POSITION
WEAK
COMPETITIVE
POSITION
SLOW MARKET GROWTH
RAPID MARKET GROWTH

108

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

109

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

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