Fig. 8-4: Grand Strategy Selection Matrix Overcome Weakness Maximize Strengths Vertical integration Conglomerate diversification Horizontal integration Concentric diversification Joint venture Turnaround or retrenchment Divesture Liquidation Concentrated growth Market development Product development Innovation Interna l (redirec ted resource s within the firm) External (acquisiti on or merger for resource capability ) I IV II I I I
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Fig. 8-4: Grand Strategy Selection Matrix
Overcome Weakness
Maximize Strengths
Vertical integration
Conglomerate diversification
Horizontal integration
Concentric diversification
Joint venture
Turnaround or retrenchment
Divesture
Liquidation
Concentrated growth
Market development
Product development
Innovation
Internal (redirected resources within the firm)
External (acquisition or merger for resource capability)
I
IV III
II
Fig. 8-5: Model of Grand Strategy Clusters
Rapid Market Growth
Slow Market Growth
• Reformulation of concentrated growth
• Horizontal integration
• Divestiture
• Liquidation
• Turnaround or retrenchment
• Concentric diversification
• Conglomerate diversification
• Divestiture
• Liquidation
• Concentrated growth
• Vertical integration
• Concentric diversification
• Concentric diversification
• Conglomerate diversification
• Joint ventures
Strong Competitive Forces
Weak Competitive Forces
I II
IIIIV
Fig. 9-1: The BCG Growth-Share Matrix
Cash Generation (market share)
High Low
High
Low
Cash Use (growth rate)
Fig. 8-5: BDC’s Growth/Share Matrix
Fig. 9-1: The BCG Growth-Share Matrix
Market Share
Sales relative to those of other competitors in the market (dividing point is usually selected to have
only the two-three largest competitors in any market
fall into the high market share region)
Growth Rate
Industry growth rate in constant dollars (dividing
point is typically the GNP’s growth rate)
Description of Dimensions
Fig. 9-3: Industry Attractiveness-Business Strength Matrix
Industry Attractiveness
High LowMedium
High
Medium
LowBu
sin
ess
Str
eng
th
Fig. 9-3: Industry Attractiveness-Business Strength Matrix
Industry Attractiveness
Subjective assessment based on broadest
possible range of external opportunities & threats
beyond the strict control
of management
Business Strength
Subjective assessment of how strong a
competitive advantage is created by a broad range
of the firm’s internal strengths & weaknesses
Description of Dimensions
Fig. 9-4: The Market Life-Cycle Competitive Strength Matrix
Stage of Market Life Cycle
Introduction Growth Maturity Decline
Lo
wM
od
erat
eH
igh
Co
mp
etit
ive
Str
eng
th
Push: Invest
Aggressively
Caution: In
vest
Selectively
Danger: Harvest
Fig. 9-4: The Market Life Cycle - Competitive Strength Matrix
Stage of Market Life Cycle
See page 197
Competitive Strength
Overall subjective rating, based on a wide range of factors regarding the likelihood of gaining &
maintaining a competitive advantage
Description of Dimensions
The business unit competitive position
Strong Average WeakFig. 8-10: The Life-Cycle Portfolio Matrix
Development
Growth
Competitive shakeout
Maturity
Decline
Saturation
Th
e In
du
stry
’s s
tag
e in
th
e ev
olu
tio
nar
y lif
e cy
cle
Fig. 8-7: The GE Nine-Cell Planning Grid
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