Fig.

8-4: Grand Strategy Selection Matrix

Overcome Weakness

Turnaround or
Vertical integration
retrenchment
Conglomerate
Divesture External
Internal diversification
(redirected Liquidation (acquisition or
I II merger for
resources
IV III resource
within the
firm) Concentrated growth Horizontal integration capability)
Market development Concentric diversification
Product development Joint venture
Innovation

Maximize Strengths
 Fig. 8-5: Model of Grand Strategy Clusters

Rapid Market Growth

• Reformulation of concentrated
• Concentrated growth
growth
• Vertical integration
• Horizontal integration
• Concentric diversification
• Divestiture
• Liquidation
Strong Weak
I II
Competitive Competitive
IV III
Forces Forces
• Concentric diversification • Turnaround or retrenchment
• Conglomerate diversification • Concentric diversification
• Joint ventures • Conglomerate diversification
• Divestiture
• Liquidation

Slow Market Growth

 Fig. 9-1: The BCG Growth-Share Matrix

Cash Generation (market share)

High Low

Cash High
Use
(growth
rate) Low
Fig. 8-5: BDC’s Growth/Share Matrix
 Fig. 9-1: The BCG Growth-Share Matrix

Description of Dimensions

Market Share Growth Rate

Sales relative to those of Industry growth rate in
other competitors in the constant dollars (dividing
market (dividing point is point is typically the
usually selected to have GNP’s growth rate)
only the two-three largest
competitors in any market
fall into the high market
share region)
Fig. 9-3: Industry Attractiveness-Business
Strength Matrix
Industry Attractiveness

High Medium Low

High
Business Strength

Medium

Low
Fig. 9-3: Industry Attractiveness-Business
Strength Matrix

Description of Dimensions

Industry Attractiveness Business Strength

Subjective assessment Subjective assessment
based on broadest of how strong a
possible range of external competitive advantage is
opportunities & threats created by a broad range
beyond the strict control of the firm’s internal
of management strengths & weaknesses
Fig. 9-4: The Market Life-Cycle Competitive
Strength Matrix

Stage of Market Life Cycle

Introduction Growth Maturity Decline

t
es
High

v
: In ively
Competitive Strength

s h s
Pu gres
Ag est
Moderate

v
n: In l y
o e
auti ectiv
C el
S est
arv
r: H
nge
Da
Low
Fig. 9-4: The Market Life Cycle - Competitive
Strength Matrix

Description of Dimensions

Stage of Market Life Cycle Competitive Strength

Overall subjective rating,
based on a wide range
of factors regarding the
See page 197
likelihood of gaining &
maintaining a competitive
advantage
 The business unit competitive position
Fig. 8-10: The Life- Strong Average Weak
Cycle Portfolio Matrix
Development

Th e Industry’s stage in the evolutionary life

Growth

Competitive
cycle

shakeout

Maturity

Saturation

Decline
Fig. 8-7: The GE Nine-Cell
Planning Grid