Grand Strategy Matrix

Grand Strategy Matrix

Group Members:Akshaya Kadam MFM - 13Deepika Shetty MFM - 39Anushri Purao MMM - 12Sandeep Maurya MIM - 10

1IntroductionGrand 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.

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1.Product DevelopmentIt focuses on substantial modification of existing products developing new products for currently served markets and customersFor 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.4For 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.

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62.Market DevelopmentIt involves selling a present product/ Services into new markets.Managers can take action like:Targeting PromotionsOpening sales officesCreating alliances to operationalize market developing strategy.

73.Centric DiversificationIt focuses on creating portfolio of related businessesPortfolio is usually developed by acquisition rather than by internal new business creationProduct market synergies are major issue in creating a portfolio of related strategic business units(SBUs).For. E.g. MTNL Providing internet services to users.84.Backward IntegrationIt 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.

95.Forward IntegrationIt 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.

10Market PenetrationIncreasing market share for present products in present market through greater marketing efforts.Quadrant II containsthatcompany'shavingweakcompetitivesituationandrapidmarketgrowth.Firmspositionedin Quadrant IIneedtoevaluatetheirpresentapproachto themarketplaceseriously.Althoughtheirindustry is growing, theyareunabletocompeteeffectively,andtheyneedto determinewhythe firm's currentapproachis ineffectualandhowthecompanycanbestchangetoimproveitscompetitiveness.BecauseQuadrant IIfirmsarein arapid-market-growthindustry,an intensivestrategy(asopposedto integrative ordiversification)isusuallythefirstoptionthatshould beconsidered

Rapid market growthQuadrant 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 IIIThe 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 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 DiversificationSecondly 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 IVFirms 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 4Concentric DiversificationHorizontal DiversificationConglomrat DiversificationJoint Venture

Concentric DiversificationThis 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 DiversificationThe 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 diversificationIn 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 VentureFinally these firms/Companies can go for joint ventures to fulfill their internal growth needs.