Discuss the Grand Strategy Matrix Dimensions in Detail

Grand Strategy Matrix is one of important matrix of strategy formulation frame work. For formulation of alternative strategies, it is popular tool. In Grand Strategy Matrix there are four kinds of quadrants and an organization is placed in one of these four quadrants. In each quadrant of the matrix there is set of strategies specified on the sequential order of attractiveness that are considered by the organization. SWOT Analysis, PEST Analysis, TOWS Matrix and grand strategy matrix all are adopted for same purpose of promoting and establishing business in the market.

Grand Strategy Matrix Dimensions

Grand Strategy Matrix is based on two important dimensions.

• Market Growth
• Competitive Position

All possible strategies are included in all the four quadrants.

First Quadrant:

The first quadrant of Grand Strategy Matrix indicates that the organization has strong competitive position & there is rapid growth rate in the market. The organization that lies in the first quadrant has the excellent strategic position. The organization of the first quadrant should concentrate on the current market and need to adopt the strategies of Market Development, New Product development & Market Penetration.

Second Quadrant:

The second quadrant highlights that the organization has weak competitive situation and there is fast market growth. The organization that lies in the second quadrant should evaluate its current strategy for the marketplace seriously. Although there is growing industry but the organization is not able to compete effectively. The organization of second quadrant should find out the reason that why its current strategies are not effective enough to make it competitive in the market. Moreover the organization should also try to find out the best way of change that can improve its effectiveness. It is fact that the market growth is fast in the industry so the organization of the second quadrant should consider the intensive strategy as a first option.

Third Quadrant:

The third quadrant of the Grand Strategy Matrix specifies that the organization has the weak competitive situation and the market growth rate is quite slow. The organization that lies in the third quadrant competes in the industry of slow growth and holds weak competitive position. The organization should seriously adopt certain drastic changes that can minimize further demise and the resulting liquidation. It is better option for the organization that it should adopt extensive asset & cost reduction. There is another suitable option that the organization should keep resources away from the current declining business & put those resources into other diversified areas. Even if all other diversified projects failed then there is last option for the organization to be liquidate itself.

Fourth Quadrant:

The fourth quadrant of highlights that the organization has strong competitive situation and the market growth rate is slow. The organization that lies in the fourth quadrant has strong competitive position but the industry in which the organization relates has slow growth. The organization can have suitable option o initiate diversified programs into other growth areas. The organization of fourth quadrant generates excessive cash while its internal needs are limited and therefore it has potential to become involved in horizontal, conglomerate or concentric diversification in a successful manner. Furthermore, joint ventures are also pursued by the organizations of fourth quadrant.

Each quadrant contains a set of certain strategies which are discussed below.

Strategies of First Quadrant:

First quadrant contains the following strategies

• Market Development
• Product Development
• Market Penetration
• Backward Integration
• Forward Integration
• Horizontal Integration
• Concentric Diversification

Strategies of Second Quadrant:

Second Quadrant of the Grand Strategy Matrix includes the following set of strategies

• Market Development
• Product Development
• Market Penetration
• Horizontal Integration
• Liquidation
• Divestiture

Strategies of the Third Quadrant:

There are certain set of Marketing Strategies that are categorized in the third quadrant. These strategies are listed below

• Horizontal Diversification
• Concentric Diversification
• Conglomerate diversification
• Retrenchment
• Liquidation

Strategies of the Fourth Quadrant:

• Horizontal Diversification
• Joint Ventures
• Concentric Diversification
• Conglomerate Diversification

Conclusion:

Every organization must fall in any one of the four quadrants. The organization that lies in the first quadrant must adopt those set of strategies that are specified in that quadrant. Similarly the organization that lies in the second quadrant must adopt the given set of strategies in that quadrant. In the same manner the organizations lie in the third & fourth quadrants must follow the set of strategies of the third & fourth quadrants respectively.