Fig.

8-4: Grand Strategy Selection Matrix

Overcome Weakness

Turnaround or
Vertical integration
retrenchment
Conglomerate
Divesture
Internal diversification External
(redirected Liquidation (acquisition
I II or merger
resources
IV III for resource
within the
firm) Concentrated growth Horizontal integration capability)
Market development Concentric
Product development diversification
Joint venture
Innovation

Maximize Strengths
 Fig. 8-5: Model of Grand Strategy Clusters

Rapid Market Growth

• Reformulation of
concentrated growth
• Concentrated growth • Horizontal integration
• Vertical integration • Divestiture
• Concentric • Liquidation
Strong diversification Weak
I II
Competitive Competitive
IV III
Forces Forces
• Concentric diversification • Turnaround or retrenchment
• Conglomerate • Concentric diversification
diversification • Conglomerate
• Joint ventures diversification
• Divestiture
• Liquidation

Slow Market Growth

 Fig. 9-1: The BCG Growth-Share Matrix

Cash Generation (market share)

High Low

Cash High
Use
(growth
rate) Low
Fig. 8-5: BDC’s Growth/Share Matrix
 Fig. 9-1: The BCG Growth-Share Matrix

Description of Dimensions

Market Share Growth Rate

Sales relative to those of Industry growth rate in
other competitors in the constant dollars (dividing
market (dividing point is point is typically the
usually selected to have GNP’s growth rate)
only the two-three largest
competitors in any market
fall into the high market
share region)
Fig. 9-3: Industry Attractiveness-Business
Strength Matrix
Industry Attractiveness

High Medium Low

High
Business Strength

Medium

Low
Fig. 9-3: Industry Attractiveness-Business
Strength Matrix

Description of Dimensions

Industry Attractiveness Business Strength

Subjective assessment Subjective assessment
based on broadest of how strong a
possible range of external competitive advantage is
opportunities & threats created by a broad range
beyond the strict control of the firm’s internal
of management strengths & weaknesses
Fig. 9-4: The Market Life-Cycle Competitive
Strength Matrix

Stage of Market Life Cycle

Introduction Growth Maturity Decline

t
es
High
Competitive Strength

v
h: In ively
s s
Pu gres t
Ag es
Moderate

v
n: In ly
u tio ctive
Ca ele est
S v
Har
r:
nge
Low

Da
Fig. 9-4: The Market Life Cycle - Competitive
Strength Matrix

Description of Dimensions

Stage of Market Life Competitive Strength

Cycle Overall subjective rating,
based on a wide range
of factors regarding the
See page 197 likelihood of gaining &
maintaining a competitive
advantage
 The business unit competitive position
Fig. 8-10: The Life- Strong Average Weak
Cycle Portfolio Matrix
Development

Th e Industry’s stage in the evolutionary

Growth
life cycle

Competitive
shakeout

Maturity

Saturation

Decline
Fig. 8-7: The GE Nine-Cell
Planning Grid