The S.P.B.

College of
Business Administration
2008-2009

Strategic
Management
Assignment
On
Grand Strategy

Submitted To: Mr. Hormaz Patel

Submitted By: Doshi Rushabh (14)

T.Y.BBA 6th sem. (A)

 Grand Strategy
Identification of various alternatives strategies is an important
Aspects of strategic management as it provide the
alternatives which can be considered and selected for
implementation in order to arrive at certain result. At this stage, the
managers are able to complete their environmental analysis and
appraisal of their strengths and they are in a position to identify
what alternatives strategies are available for them in the light of
their organizational mission.

In this there are four main strategies:

1) Stability Strategy

2) Growth/Expansion Strategy

3) Retrenchment Strategy

4) Combination Strategy
1) Stability Strategy:
Basic approach in the stability strategy is ‘maintain present
course: steady as it goes.’

In an effective stability strategy, companies will concentrate

their resource where the company presently has or can rapidly
develop a meaning full competitive advantage in the narrowest
possible product market scope consistent with the firm’s resource
and market requirements.

Many companies in different industries have been forced to

adopt stability strategy because of over capacity in the industries
concerned.

For Example:

Steel Authority of India has adopted stability strategy

because of over capacity in steel sector. Instead it has concentrated
on increasing operational efficiency of its various plants rather
than going for expansion. Others industries are ‘heavy commercial
vehicle’, ‘coal industry’.
2) Growth/Expansion:
Growth strategy is much talked in the present Indian
environments, if we look at the corporate performance in the recent
years. We find out that various organizations have grown both in
terms of sales and profit as well as assets. Some organizations have
grown so fast.

For Example:

Nirma ltd., Reliance Industry Ltd., infact, in the life of any

organization, growth strategy is necessary at some point of time.
James has identified those five stages emergence, growth maturity
and decline.
TISCO establish in 1907 is still the leader in steel sector. It
suggests that the strategies fooled by organizations will determine
the application of various stages.

“A strategy is one that an enterprise pursue when it increase

its level of objectives upwards in significant increment, much
higher than an exploration of its past achievement level. The most
frequent increase indicating a growth strategy is to raise the market
share and or sales objectives upwards significantly.”
3) Retrenchment Strategy:
A Retrenchment grand strategy is followed when an
organization aims at a contraction of its activities through
substantial reduction or the elimination of the scope of one or more
its businesses, in terms of their respective customer groups,
customer functions or alternatives technologies either singly or
jointly on order to improve its overall performance.

Retrenchment involves a total or partial withdrawal from

either a customer group or customer functions, or the use of an
alternatives technology in one or more of firms businesses, as can
be seen from the situation as given below:

Types of Retrenchment Strategies:

 Turnaround Strategy
 Divestment Strategy
 Liquidation Strategy

For Example:

A pharmaceutical firm pulls out from retail selling to

concentrate on institutional selling in order to reduce the size of its
sales force and increase marketing efficiency.

A corporate hospital decides to focus only on specialty

treatment and realize higher revenues by reducing its commitment
to general cases which are typically less profitable to deal with.
4) Combination Strategy:
Combination Strategies are a mixture of stability, expansion
or retrenchment strategies applied either simultaneously (at the
same time in different businesses) or sequentially (at different
times in the same business).
It would be difficult to find any organization that has
survived and grown by adopting a single ‘pure’ strategy. The
complexity of doing business demands that different strategies be
adopted to suit the situational demands made upon the
organization.

For Example:

The Tube Investments of India (TI), a Murugappa group

company, has created strategic alliances in its three major
businesses: tubes, cycles, and strips. In cycles, it has entered into
regional outsourcing arrangements with the UP-based Avon (which
we could term as co-competition, as Avon is TI’s competitor in the
cycle industry) and Hamilton Cycles in the western region. In steel
strips, TI has entered into a manufacturing contract with Steel
Tubes of India, Steel Authority of India, and the Jindals.
 Bibliography

 Strategic Management by L.M. Prasad

 http://www.scribd.com/doc/6788526/Strategies