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GSM

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Arden Camille Oreto

on 21 March 2013

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Transcript of GSM

AC93 Strategic Management LOCATING COMPANIES IN A
GRAND STRATEGY MATRIX Samples of rapid market growth:

Grand Strategy Matrix Any industry whose annual growth in sales exceeds 5 percent could be considered to have rapid growth. Quadrant II
(Firms NEED TO EVALUATE PRESENT APPROACH TO THE MARKETPLACE SERIOUSLY) -+
- unable to compete effectively
- determine how the company can best change to improve its competitiveness.

AN INTENSIVE STRATEGY (AS OPPOSED TO INTEGRATIVE OR DIVERSIFICATION) is the first option
1. Market development
2. Market penetration
3. Product development

IF THE FIRM IS LACKING A DISTINCTIVE COMPETENCE OR COMPETITIVE ADVANTAGE
4. Horizontal integration

AS A LAST RESORT, THE FF CAN provide funds needed to acquire other businesses or buy back shares of stock.
5. Divestiture
6. Liquidation
Quadrant I
(EXCELLENT STRATEGIC POSITION ) ++ - firms can afford to take advantage of external opportunities in several areas.
- take risks aggressively when necessary.

CONTINUED CONCENTRATION ON CURRENT MARKETS THROUGH:
1. Market development
2. Market penetration
3. Product development

WHEN FIRM HAS EXCESSIVE RESOURCES, ff strategies may be effective.
4. Forward integration
5. Backward integration
6. Horizontal integration

WHEN FIRM IS TOO HEAVILY COMMITTED TO A SINGLE PRODUCT, RELATED DIVERSIFICATION MAY REDUCE THE RISKS ASSOCIATED WITH A NARROW PRODUCT LINE
7. Related diversification
A popular tool for
formulating alternative strategies. All organizations
can be positioned in one of the
Grand Strategy Matrix’s four
strategy quadrants. based on two evaluative
dimensions (competitive
position and market
growth) Appropriate strategies are
listed in sequential order
of attractiveness in each
quadrant of the matrix.
- should make drastic changes quickly

1. Retrenchment- extensive cost/ asset reduction

AN ALTERNATIVE STRATEGY IS TO DIVERSIFY.
2. Related diversification
3. Unrelated diversification

IF ALL ELSE FAILS, THE FINAL OPTIONS
4. Divestiture
5. Liquidation
Quadrant III
(COMPETE IN SLOW-GROWTH
INDUSTRIES AND HAVE WEAK
COMPETITIVE POSITIONS.) -- Quadrant IV
(STRONG COMPETITIVE
POSITION BUT ARE IN A SLOW
GROWTH INDUSTRY.)+-

- strength in launching diversified programs
into more capable growth areas.
- firms have high cash flow levels & limited
internal growth

1. Related diversification
2. Unrelated diversification
3. Joint ventures GSM
Purpose
Full transcript