IE

and
GRAND Strategy
Matrix

Presenter:
Muhammad Absar Hussain

1
Strategy-Formulation Framework
SWOT Matrix

SPACE Matrix

Stage 2: BCG Matrix

The Matching Stage

IE Matrix

Grand Strategy Matrix

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The Internal-External Matrix

 Positions an organization’s various divisions

in a nine-cell display
 Similar to BCG Matrix except the IE Matrix:
 Requires more information about the divisions
 Strategic implications of each matrix are different

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IE Matrix

 Based on two key dimensions

 The IFE total weighted scores on the x-axis
 The EFE total weighted scores on the y-axis
 Divided into three major regions
 Grow and build – Cells I, II, or IV
 Hold and maintain – Cells III, V, or VII
 Harvest or divest – Cells VI, VIII, or IX

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IFE Matrix
EFE Matrix
IE Matrix
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Strategy-Formulation Framework
SWOT Matrix

SPACE Matrix

Stage 2: BCG Matrix

The Matching Stage

IE Matrix

Grand Strategy Matrix

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Grand Strategy Matrix

 Tool for formulating alternative

strategies
 Based on two dimensions
 Competitive position
 Market growth

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 RAPID MARKET GROWTH
Quadrant II Quadrant I
1. Market development 1. Market development
2. Market penetration 2. Market penetration
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
6. Liquidation 6. Horizontal integration
WEAK 7. Related diversification
STRONG
COMPETITIVE COMPETITIVE
POSITION Quadrant III Quadrant IV
POSITION
1. Retrenchment 1. Related diversification
2. Related diversification 2. Unrelated diversification
3. Unrelated diversification 3. Joint ventures
4. Divestiture
5. Liquidation

SLOW MARKET GROWTH

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Grand Strategy Matrix

Quadrant I

Excellent strategic position

Concentrationon current
markets/products
Take risks aggressively when
necessary
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Grand Strategy Matrix

Quadrant II

Evaluate present approach

How to improve
competitiveness
Rapid market growth requires
intensive strategy
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Grand Strategy Matrix

Quadrant III

Compete in slow-growth industries

Weak competitive position
Drastic changes quickly
Cost & asset reduction
(retrenchment)
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Grand Strategy Matrix

Quadrant IV

Strong competitive position

Slow-growth industry
Diversification
to more
promising growth areas

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 Industry Overview
 Athletic footwear manufactures captured nearly one-third of the total
footwear market in the early 1970s.
 Over a span of more than 25 years, American consumers spent $300 billion
on 7.5 billion pairs of athletic shoes.
 Reebok international Ltd. and Adidas became $ 3.5 Billion companies, while
Nike Inc. became the first ever $ 9.5 Billion company.
 By 1996 the number of establishments had dropped to about 52, with 12
factories closing since 1995.
 China's imports increase by 6 percent to 1.26 billion pairs in 2003 .
 Brazil's share increased 2.3 percent to 83.5 million pairs in 2003.
 Vietnam's share jumped 91.9 percent to 23.5 million pairs in 2003.
 The US markets continue to be dominated by imports from countries with
low-cost labor.
 From 1997 to 2001, the value of industry shipments declined from $ 219.6
million to $106.5 million.
 U.S. shoe manufacturing plants declined by 775 between 1967 and 2001,
the number of new plants opening dwindled to nearly zero.
Athletic Shoe Market Share
(2000)
Competitive Profile Matrix (CPM)
The Grand Strategy Matrix

 Potential Strategies:
 - Market
Development
 - Market
Penetration
 - Product
Development
 - Backward
Integration
 - Forward Integration
 - Concentric
Diversification
Matrix Analysis
Decisions

 Primary: Focus on finding the most promising customers (kids

and women) and introduce more products or improve current
ones to satisfy potential increase in demand

 Alternative:
 Keep expanding into current and future foreign markets by being
aggressive and the worldwide leader of the footwear industry
 Accelerate funding for numerous marketing campaigns in order to get to
specific markets or customer groups
 Focus on improving working conditions and human rights at international
manufacturer centers and at the same time increasing their productivity
 Implement product diversification with company’s newest technologies
so resulting increased earnings could be reinvested into R&D plans
Why this strategy?

 U.S. Women: Prefer fashion, not footwear, they

prefer clothing, we must create a shopping style
based in athletic shopping.
 U.S. Kids: E-commerce, influenced by
innovation and design, not only comfort or sports
 We need to consolidate US sales compared to
international sales and international competitors
 Difficult to expand towards other sports or
population segments