Grand Strategies

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Grand Strategies


Grand strategies are also called strategic thrusts. They provide basic direction for specific strategic actions and functional tactics. Some grand strategies are used together and reinforce each other and some are usually employed singly.

Grand Strategy




General plan of major action to achieve longterm goals Falls into three general categories 1. Growth 2. Stability A separate grand strategy can be 3. Retrenchment defined for global operations

Grand Strategy: Growth


Growth can be promoted internally by investing in expansion or externally by acquiring additional business divisions -

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Internal growth = can include development of new or changed products External growth = typically involves diversification – businesses related to current product lines or into new areas

Grand Strategy: Stability


Stability, sometimes called a pause strategy, means that the organization wants  

to remain the same size or to grow slowly and in a controlled fashion

Grand Strategy: Retrenchment


Retrenchment = the organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses Liquidation = selling off a business nit for the cash value of the assets, thus terminating its existence Divestiture = involves selling off of businesses that no longer seem central to the corporation





Corporate-Level Strategy: What business are we in? Business-Level Strategy: How do we compete?

Three Levels of Strategy in Organizations
Corporation

Textiles Unit

Chemicals Unit

Auto Parts Unit

Functional-Level Strategy: How do we support the business-level strategy? Finance R&D Manufacturing Marketing

Global Corporate High Strategies
Need for Global Integration
• Treats world as a single global market • Standardizes global products/advertising strategies

Globalization Strategy

Transnational Strategy

• Seeks to balance global efficiencies and local responsiveness • Combines standardization and customization for product/advertising strategies

Export Strategy
•Domestically focused •Exports a few domestically produced products to selected countries

Multi-domestic Strategy • Handles markets independently for each country • Adapts product/advertising to local tastes and needs

Low

Low

Need for National Responsiveness

High

Global Strategy






Globalization = product design and advertising strategies are standardized around the world Multi-domestic = adapt product and promotion for each country Transnational = combine global coordination with flexibility to meet specific needs in various countries

Purpose of Strategy
The plan of action that prescribes resource allocation and other activities for dealing with the environment, achieving a competitive advantage, that help the organization attain its goals Strategies focus on: ● Core competencies ● Developing synergy ● Creating value for customers 

long-term objectives?
Profitability  Productivity  Competitive Position  Employee Development  Employee Relations  Technological Leadership  Public Responsibility 

The Grand Strategy Matrix
Rapid Market Growth

1. Market development 2. Market penetration 3. Product development 4. Horizontal integration 5. Divestiture 6. Liquidation Weak Competitive Position

1. Retrenchment 2. Concentric diversification 3. Horizontal diversification 4. Conglomerate diversification 5. Divestiture 6. Liquidation

I II IV III

1. Market development 2. Market penetration 3. Product development 4. Forward integration 5. Backward integration 6. Horizontal integration 7. Concentric diversification

1. Concentric diversification 2. Horizontal diversification `3. Conglomerate diversification 4. Joint ventures

Strong Competitive Position

Slow Market Growth

Ex. 7-9: Grand Strategy Selection Matrix

Overcome weaknesses
Turnaround or retrenchment...
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