Chapter2: Grand Strategies

Session # 4
 Topics for the Day
• 2.1 Overview of Grand Strategies

• 2.2 Types of Grand Strategies

 2.1 Overview

• Designed to identify the firm’s choice

• Direction to follow the objectives
• (Firm to make a choice & follow direction)

• Choosing long term plans from alternatives.

• Master Strategies or Corporate Strategies.

• Business defined along 3 dimensions:

• Customer groups (Target group)
• Customer functions (Service that is being offered)
• Technology alternatives (Technological changes)
 2.1 Overview

• Common to find multi-business firms with

interests in serving a diverse base of
customer groups

• 4 strategic alternatives
• 1. Stability Strategy
• 2. Expansion Strategy
• 3. Retrenchment Strategy
• 4. Combination Strategy
 I. Stability Strategy
• Maintain its current position

• Incremental improvement
 Which companies adopt?
• Firms that are risk averse

• Small scale businesses

• If market conditions are not favorable, and the

firm is satisfied with its performance

• Firms, which are slow and reluctant to change.

 No Change
• Maintaining present business
• If Env is stable – Firms will continue its current
position ( Not threats, No Economic
disturbance, No change in strengths)
• No Decision is sometimes a decision
 Profit Strategy
• Org aims to maintain the profit
• Due to lower profitability:
• A. the firm may cut costs,
• B. reduce investments,
• C. raise prices,
• D. increase productivity or
• E. adopt any methods to overcome the
temporary difficulties.
 Profit Strategy
• If the problem persists for long, then profit
strategy would only deteriorate the firm’s
overall financial position.
 Pause / Proceed Strategy
• Often followed by the manufacturing
companies who study the market conditions
thoroughly and then launch their new
products into the market.
Time for Case Study