Grand Strategy Matrix

Grand Strategy
Matrix
Group Members:
Akshaya Kadam MFM - 13
Deepika Shetty
MFM 39
Anushri Purao
MMM 12
Sandeep Maurya MIM 10
Introduction
Grand Strategy is also called as Master or Business
Strategies which provides basic direction for
Strategic Action.
It is co-ordinated and sustainable efforts directed
towards achieving long term objectives.
It also indicates the time period over which long
range objectives are to be achieved.
Thus, it is called as comprehensive general
approach that guides a firms major actions.
1.Product Development
It
focuses on substantial modification of existing

products developing new products for currently served
markets and customers
For e.g. In India MC Donald has more than 70% of the
menu has been locally developed with complete
segregation of vegetarian and non-vegetarian products
right from the food processing plants to the point of
serving the customers. McDonald 'commitment to its
Indian customers is evident even in development of
special sauces that use local spices and chilies.
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For E.g. Gillette Guard is designed

taking into the fact that Indian men
prefer lighter weight razor although
most men in U.S. and Western
Europe prefer a heavy razor handle.
2.Market Development
It
involves selling a present product/ Services into

new markets.
Managers can take action like:
Targeting Promotions
Opening sales offices
Creating alliances to operationalize market
developing strategy.
3.Centric Diversification
It focuses on creating portfolio of related
businesses
Portfolio is usually developed by acquisition rather
than by internal new business creation
Product market synergies are major issue in
creating a portfolio of related strategic business
units(SBUs).
For. E.g. MTNL Providing internet services to
users.
4.Backward Integration
It
involves a purchase of suppliers in order to

reduce supplier dependency with regard to e.g.
timely deliveries, quality concerns, innovation
ability .
For e.g. Starbucks has bought a farm in China
instead of buying coffee beans from Suppliers. By
buying a coffee farm, Starbucks ensures that it will
have a bean supply and that it will receive it at a
reasonable price.
5.Forward Integration
It
is a strategy in which companies expand their activities

to control the direct distribution of their products.
It is a form of management control that involves companies
in the same supply chain belonging to one owner.
For.e.g. Reliance petroleum which opened its own petrol
pumps all over India is one example.
Arvind mills which is involved in producing cotton textile
opened its own retail outlets like Megamart, arrows, flying
machine also a example for forward integration.
Market Penetration
Increasing
market share for present products in

present market through greater marketing efforts.
Quadrant II
contains that company's having weak competitive sit
uation 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 i
mprove 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 shoul
d be considered
Rapid market growth
Quadrant II Strategies
Horizontal integration - Seeking ownership of competitors
Vertical integration Merger of companies at different

stages of production and/or distribution in the same industry
Divestiture - Selling a division or part of an organization.
Liquidation - Selling all of a companys assets
Quadrant II Examples
Quadrant III
The firms that fall in this quadrant are operating in a slow

growth industry with a weak competitive position and are
prone to result in liquidation.
To avoid such situations quadrant three firms needs

introduce drastic changes in almost all the areas of
managing the company.
The management should be willing to incur some

extensive costs in the overall revamp of the organization.
Retrenchment
o
Strategically retrenchment (assets reduction) would

be the best option to be considered first.
These firms should strategize to reduce the

expenditure and gain financial stability.
Typically the strategy involves withdrawing from

certain markets or the discontinuation of selling
certain products or services in order to make a
beneficial turn around.
Related / Unrelated
Diversification
Secondly diversifying the overall business through

shifting the resources should be evaluated as another
choice.
These firms should opt for diversification either by

creating a new product or creating a new product for
new market.
Liquidation.
The final option is again divesture or liquidation.
If the firms cant survive even after Retrenchment and

diversification, it reaches the liquidation stage, the last
stage of the firm or product.
Quadrant IV
Firms in this quadrant are strong competitors in slow growth

industries or sectors. Such firms will typically have the
financial strength and other resources necessary to pursue
diversification strategies or even joint ventures.
Main Concept of Quadrant 4
Concentric Diversification
Horizontal Diversification
Conglomrat Diversification
Joint Venture
Concentric Diversification
This means that there is a technological similarity

between the industries, which means that the firm is able
to leverage its technical know-how to gain some
advantage. For example, a company that manufactures
industrial adhesives might decide to diversify into
adhesives to be sold via retailers. The technology would
be the same but the marketing effort would need to
change.
Continue..
It also seems to increase its market share to launch a new

product that helps the particular company to earn profit. For
instance, the addition of tomato ketchup and sauce to the
existing "Maggi" brand processed items of Food Specialties
Ltd. is an example of technological-related concentric
diversification.
Horizontal Diversification
The company adds new products or services that are often

technologically or commercially unrelated to current
products but that may appeal to current customers. This
strategy tends to increase the firm's dependence on certain
market segments.
For example, a company that was making notebooks earlier
may also enter the pen market with its new product.
Conglomerate diversification
In this new products or services that are related are added.

It can be implemented:
When basic industry of an organization is facing a downfall
in annual sales and profit.
When an organization has the opportunity to purchase an
unrelated business that looks like an attractive investment.
When there is a financial synergy between acquired and
acquiring organization.
When existing markets are saturated by the organization's
present products.
Joint Venture
Finally these firms/Companies can go for joint ventures to

fulfill their internal growth needs.

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Grand Strategy

focuses on substantial modification of existing

For E.g. Gillette Guard is designed

involves selling a present product/ Services into

involves a purchase of suppliers in order to

is a strategy in which companies expand their activities

market share for present products in

Rapid market growth

Horizontal integration - Seeking ownership of competitors

Vertical integration Merger of companies at different

Divestiture - Selling a division or part of an organization.

Liquidation - Selling all of a companys assets

The firms that fall in this quadrant are operating in a slow

To avoid such situations quadrant three firms needs

The management should be willing to incur some

Strategically retrenchment (assets reduction) would

These firms should strategize to reduce the

Typically the strategy involves withdrawing from

Secondly diversifying the overall business through

These firms should opt for diversification either by

The final option is again divesture or liquidation.

If the firms cant survive even after Retrenchment and

Firms in this quadrant are strong competitors in slow growth

Main Concept of Quadrant 4

This means that there is a technological similarity

It also seems to increase its market share to launch a new

The company adds new products or services that are often

In this new products or services that are related are added.

Finally these firms/Companies can go for joint ventures to

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