GRAND STRATEGY

MATRIX
Learning Objectives:
• to assist you evaluate the potential direction you decide to move in as a
business.
• to increase the size of the firm in terms of revenue, market share,
geographic reach, or a combination of these elements.
What is Grand Strategy Matrix?
Grand strategy matrix is the instrument for creating alternative and
different strategies for the organization.

The Grand Strategy Matrix is based on two dimensions:

• competitive position, and
• market growth.
What is Grand Strategy Matrix?
This matrix offers feasible strategies for a company to consider which are listed in
sequential order of attractiveness in each quadrant of the matrix.

Data needed for positioning SBUs in the matrix is derived from the portfolio analysis.

Each of the four quadrants has a number of strategic options and the framework is
designed to assist you evaluate the potential direction you decide to move in as a
business.
What is Grand Strategy Matrix?
First Quadrant:(Strong Competitive Position and Rapid Market Growth)

If your business is in this quadrant then you have a strong competitive position
and the market is in rapid growth. Arguably this is the best quadrant to be in,
with opportunity high and your position strong.
Such firms or divisions are better to adopt and pursue strategies such as market
development, market penetration, product development etc. The idea behind is
to focus and make the current competitive base stronger.
What is Grand Strategy Matrix?
Second Quadrant:(Weak Competitive Position and Rapid Market Growth)
If your business is in this quadrant then you have a relatively weak competitive situation as
a business, but there’s a lot of opportunity to go for and a lot of success to be had within the
market. The strategies in this position are all about why you’re not taking advantage of the
position. If you’re placed in this quadrant then you know you can change to improve
results.
The suitable strategies for such firms are to develop the products, markets, and to penetrate
into the markets. Because Quadrant II firms are in a rapid-market-growth industry, an
intensive strategy (as opposed to integrative or diversification) is usually the first option
that should be considered.
What is Grand Strategy Matrix?
Third Quadrant:(Weak Competitive Position and Slow Market
Growth)
Being in the third quadrant means you have a weak competitive situation
and the market is also quite slow. This is a tricky position because you’re
already not doing well and there isn’t the huge opportunity that presents
itself like the second quadrant. If you find yourself here you need to consider
major changes to improve your competitive position, consider areas such as
cost reduction, differentiation or diversification.
What is Grand Strategy Matrix?
Third Quadrant:(Weak Competitive Position and Slow Market Growth)
These firms must make some drastic changes quickly to avoid further demise
and possible liquidation.
Extensive cost and asset reduction (retrenchment) should be pursued first. An
alternative strategy is to shift resources away from the current business into
different areas.
If all else fails, the final options for Quadrant III businesses are divestiture or
liquidation.
What is Grand Strategy Matrix?
Fourth Quadrant:(Strong Competitive Position and Slow Market Growth)

If you’re placed within the fourth quadrant you have a strong competitive
situation, which is great, but your market is slow to grow or in decline.
This lends itself to strategies such as diversification as you have the funds to
innovate in numerous areas before the market decline becomes unsustainable.
Watch out for cheaper competitors entering the market to attack you as the leader.
What is Grand Strategy Matrix?
Fourth Quadrant:(Strong Competitive Position and Slow Market Growth)
Such firms are better to go into related or unrelated integration in order to create a
vast market for products and services.
These firms also have the strength to launch diversified programs into more
promising growth areas.
Quadrant IV firms have characteristically high cash flow levels and limited
internal growth needs and often can pursue concentric, horizontal, or conglomerate
diversification successfully. Quadrant IV firms also may pursue joint ventures
Grand Strategy Matrix Analysis
Generally, strategies listed in the first quadrant of Grand Strategy Matrix are
intended to maintain a firm’s competitive edge and boost rapid growth, while
the other three quadrants represent appropriate actions to take to reach the
best position, which is the first quadrant.
Increasing market share, expanding to new markets and creating new products
are common strategies.
STRATEGIES IN THE GRAND STRATEGY MATRIX
 What are the advantages of the Grand
Strategy Matrix?
• It’s simple to use and understand
• It has a comprehensive list of strategic options
• It can stimulate discussion and help frame decisions
• It can be applied to any industry or marketplace
 What are the limitations of the Grand
Strategy Matrix?
• It only provides options rather than success criteria
around them
• You need to use it with other tools
• The matrix is simplistic so loses some nuance
• Your business may operate in multiple quadrants if you
have many products or services
 What preparation should be done before
using a Grand Strategy Matrix?
• You’ll need to understand your current performance
within a market and the trajectory of that market in
order to correctly position yourselves on the Grand
Strategy Matrix.
How often should a company use the Grand
Strategy Matrix?
• Whenever a company is assessing their strategic
options, the Grand Strategy Matrix can be used to
generate discussion and options.
 GRAND STRATEGY MATRIX

• The efficiency of the management greatly depends

upon adoption of and pursuing the strategies consistent
with the market and competitive position of the firm.
For devising appropriate strategy management is
required to reveal the firm’s competitive position and
market place through a scientific analysis of its current
position. Grand Strategy Matrix is there to simplify the
job.
 GRAND STRATEGY MATRIX

• Advantages of Grand Strategy Matrix is that, this

model allows better implementation of strategy because
of the intensified focus and objectivity.
• It conveys a lot of information about corporate plans in
a simplified format.
 GRAND STRATEGY MATRIX
• However, Grand Strategy Matrix may not be as simple
as it seems, upon application to real life due to the
unforeseen factors and also complications in the
business world. In addition, the relationship between
market share and profitability differs in different
industries. Another issue about this model is that, the
grand strategy options are mostly concern on cash
related issues but not values of the firm.
END….