IE and GRAND Strategy Matrix

Presenter: Muhammad Absar Hussain

1

Strategy-Formulation Framework
SWOT Matrix

SPACE Matrix

Stage 2: The Matching Stage

BCG Matrix

IE Matrix

Grand Strategy Matrix

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -2

The Internal-External Matrix

Positions an organizations 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

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -3

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Ch 6 -4

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 Grow and build Cells I, II, or IV Hold and maintain Cells III, V, or VII Harvest or divest Cells VI, VIII, or IX

Divided into three major regions

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -5

IFE Matrix

EFE Matrix

IE Matrix

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -9

Strategy-Formulation Framework
SWOT Matrix

SPACE Matrix

Stage 2: The Matching Stage

BCG Matrix

IE Matrix

Grand Strategy Matrix

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 6 -10

Grand Strategy Matrix

Tool for formulating alternative strategies

Based on two dimensions

Competitive position

Market growth
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 6 -11

RAPID MARKET GROWTH

1. 2.

3.
4. 5. 6.

Quadrant II Market development Market penetration Product development Horizontal integration Divestiture Liquidation

1. 2.

3.
4. 5. 6. 7.

WEAK COMPETITIVE POSITION

1. 2. 3. 4. 5.

Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Related diversification Quadrant IV Related diversification Unrelated diversification Joint ventures

Quadrant III Retrenchment Related diversification Unrelated diversification Divestiture Liquidation

STRONG COMPETITIVE POSITION

1. 2. 3.

SLOW MARKET GROWTH

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Grand Strategy Matrix

Quadrant I

Excellent

strategic position

Concentration

on current markets/products
Take

risks aggressively when necessary

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Grand Strategy Matrix

Quadrant II
Evaluate How

present approach

to improve competitiveness
Rapid

market growth requires intensive strategy

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Grand Strategy Matrix

Quadrant III
Compete Weak

in slow-growth industries

competitive position changes quickly

Drastic Cost

& asset reduction (retrenchment)

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 6 -15

Grand Strategy Matrix

Quadrant IV
Strong

competitive position

Slow-growth

industry

Diversification

to more promising growth areas

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 6 -16

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 companys 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