SM (Grand Strategy Matrix) Presentation.pptx

What is the Grand Strategy Matrix?
Definition:
The Grand Strategy Matrix is a tool used in strategic management to help a company choose the best course of action to achieve its goals and objectives. The matrix is a grid that is divided into four quadrants, each representing a different type of strategy.

Explanation:
The Grand Strategy Matrix has become a popular tool for formulating feasible strategies, along with the SWOT Analysis, SPACE Matrix, BCG Matrix, and IE Matrix. Grand strategy matrix is the instrument for creating alternative and different strategies for the organization. All companies and divisions can be positioned in one of the Grand Strategy Matrix’s four strategy quadrants. The Grand Strategy Matrix is based on two dimensions: competitive position and market growth. Data needed for positioning SBUs in the matrix is derived from the portfolio analysis. This matrix offers feasible strategies for a company to consider which are listed in sequential order of attractiveness in each quadrant of the matrix.

Quadrant I (Strong Competitive Position and Rapid Market Growth) – Firms located in Quadrant I of the Grand Strategy Matrix are in an excellent strategic position. The first quadrant refers to the firms or divisions with strong competitive base and operating in fast moving growth markets. Such firms or divisions are better to adopt and pursue strategies such as market development, market penetration, product development etc. The idea behind is to focus and make the current competitive base stronger. In case such firms possess readily available resources they can move on to integration strategies but should never be at the cost of diverting attention from current strong competitive base.

Quadrant II (Weak Competitive Position 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. The suitable strategies for such firms are to develop the products, markets, and to penetrate into the markets. 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. To achieve the competitive advantage or becoming market leader Quadrant II firms can go into horizontal integration subject to availability of resources. However if these firms foresee a tough competitive environment and faster market growth than the growth of the firm, the better option is to go into divestiture of some divisions or liquidation altogether and change the business.

Quadrant III (Weak Competitive Position and Slow Market Growth) – The firms fall in this quadrant compete in slow-growth industries and have weak competitive positions. These firms must make s

1. Grand Strategy Matrix Prepared By Osama Rahman

2. Content Grand Strategy Matrix Explanation of Quadrants S trategies in the Grand Strategy Matrix What are the advantages of the Grand Strategy Matrix limitations

3. Grand Strategy Matrix The Grand Strategy Matrix has become a popular tool for formulating feasible strategies, along with the SWOT Analysis, SPACE Matrix, BCG Matrix, and IE Matrix. Grand strategy matrix is the instrument for creating alternative and different strategies for the organization. All companies and divisions can be positioned in one of the Grand Strategy Matrix’s four strategy quadrants. The Grand Strategy Matrix is based on two dimensions: competitive position and market growth. Data needed for positioning SBUs in the matrix is derived from the portfolio analysis. This matrix offers feasible strategies for a company to consider which are listed in sequential order of attractiveness in each quadrant of the matrix .

4. Definition The Grand Strategy Matrix is a tool used in strategic management to help a company choose the best course of action to achieve its goals and objectives. The matrix is a grid that is divided into four quadrants, each representing a different type of strategy.

5. Quadrant I (Strong Competitive Position and Rapid Market Growth) Firms located in Quadrant I of the Grand Strategy Matrix are in an excellent strategic position. The first quadrant refers to the firms or divisions with strong competitive base and operating in fast moving growth markets. Such firms or divisions are better to adopt and pursue strategies such as market development, market penetration, product development etc . The idea behind is to focus and make the current competitive base stronger. In case such firms possess readily available resources they can move on to integration strategies but should never be at the cost of diverting attention from current strong competitive base.

6. Quadrant II (Weak Competitive Position 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. The suitable strategies for such firms are to develop the products, markets, and to penetrate into the markets. 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. To achieve the competitive advantage or becoming market leader Quadrant II firms can go into horizontal integration subject to availability of resources. However if these firms foresee a tough competitive environment and faster market growth than the growth of the firm, the better option is to go into divestiture of some divisions or liquidation altogether and change the business .

7. Quadrant III (Weak Competitive Position and Slow Market Growth) The firms fall in this III 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 .

8. Quadrant IV (Strong Competitive Position and Slow Market Growth) Finally , Quadrant IV businesses have a strong competitive position but are in a slow-growth industry. Such firms are better to go into related or unrelated integration in order to create a vast market for products and services. These firms also 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 .

9. Generally, strategies listed in the first quadrant of Grand Strategy Matrix are intended to maintain a firm’s competitive edge and boost rapid growth. while the other three quadrants represent appropriate actions to take to reach the best position, which is the first quadrant. Increasing market share, expanding to new markets and creating new products are common strategies.

10. STRATEGIES IN THE GRAND STRATEGY MATRIX

11. Advantages The Grand Strategy Matrix has a number of advantages : It’s simple to use and understand It has a comprehensive list of strategic options It can stimulate discussion and help frame decisions It can be applied to any industry or marketplace What are the limitations of the Grand Strategy Matrix ?

12. Limitations There are some limitations such as : It only provides options rather than success criteria around them You need to use it with other tools The matrix is simplistic so loses some nuance Your business may operate in multiple quadrants if you have many products or services