GRAND STRATEGY MATRIX

RAPID MARKET GROWTH

Quadrant II
1. Market development
2. Market penetration
3. Product development
4. Horizontal integration
5. Divestiture
6. Liquidation
Quadrant I
1. Market development
2. Market penetration
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration

WEAK STRONG
7. Concentric diversification
COMPETITIVE COMPETITIVE
POSITION POSITION

Quadrant III Quadrant IV

1. Retrenchment 1. Concentric diversification

2. Concentric diversification 2. Horizontal diversification
3. Conglomerate
3. Horizontal diversification diversification
4. Conglomerate diversification 4. Joint ventures
5. Divestiture
6. Liquidation

SLOW MARKET GROWTH

Quadrant 1
Firms located in this quadrant are in an excellent strategic position. These firms
continued concentration on current markets such as market penetration and market
development and product developments which is an appropriate strategy. The following
are recommended strategies are: market development, market penetration, product
development, forward integration, backward integration, horizontal integration, and
related diversification.

Advantages:
1. Cost advantage acts as an entry barrier.
2. The firm can bear the pressure put by the suppliers in the form of increasing
prices of their supplies as well as customers in the form of bargaining for lower
market price.

Disadvantages:
1. It can be sustained only if barriers exist that prevent competitors from achieving
the same low cost.
2. Severe cost reduction may dilute customer focus and customer interests may be
ignored.
3. Customers requiring extra features and ready to pay higher price are lost.
 Key Forward (Epilogue)

Being one of the country’s biggest supermarket chains, Puregold certainly knows how to
take advantage of the market. The company is using the common sari-sari store as a
leverage. 800,000 is the estimated number of sari-sari stores present in the country,
creating the lion’s share in the country’s retail industry. This is one of the best strategy
there is, creating an alliance with the small players instead of trying to eliminate them.
Here in Legazpi City, small sari-sari store owners are fuming by the entry of the LCC &
JY chains of convenient stores. They see it as a grave threat to their financial existence,
as this convenient stores offer a wide array of cheaper products. Local consumers
would rather purchase their groceries and supplies in these convenient stores instead of
the sari-sari ones. This kind of business strategy is financially worth doing but morally
unstable as this creates bad impressions from most small-medium retail entrepreneurs.
It’s a double edged sword; it signifies a growth in the local economy but creates tension
in the local retail society.

Puregold’s strategy of aligning itself with the sari-sari store owners, establishes a strong
financial certainty. It already has a program called “Aling Puring”, with this, sari-sari
store owners have access to Puregold’s huge product inventory-most probably at a
discount. Now, with this, small entrepreneurs would source their goods in Puregold,
eliminating in one way or another, Puregold’s competition.

Although this strategy may apply to most areas and in some others it may not, it still
creates a great leverage as a whole.