Strategic Choice

Key Point: The company needs to determine its competitive position (i.e. choice of generic strategy) and choose its future path or strategic direction (i.e. grand strategy options). In terms of grand strategy the company may pursue multiple options simultaneously.

Video Resources: Strategic Choice

 

1. Choice of Competitive Position

In this section the focus is Porter's types of generic strategy.

 

 

2. Choice of Strategy Direction (i.e. Grand Strategy options 1-4)

 The tool for determining this is Ansoff's matrix.

 

 

3. Choice of Means of Growth (i.e. other Grand Strategy Options)

 

In terms of choices the company will determine whether to undertake:

  • horizontal integration (i.e. acquire a rival);
  • vertical integration (i.e. acquire a supplier or a buyer)
  • joint ventures (i.e. partner with a company that possesses what you lack, and vice versa)
  • strategic alliances (i.e. informal arrangement to enhance individual member's competitiveness);
  • divestment and sell off assets (i.e. product(s), brand(s), division(s) that are now deemed surplus to requirements);
  • turnaround (i.e. try and stop the erosion of competitiveness and often results in job losses and a major change in the organization's scope and spread);
  • liquidation (i.e. simply terminate a business line without even seeking to sell it).

 

 4. Grand Strategy Matrix

The Grand Strategy matrix    offers a framework that suggest suitable options based upon the company's competitive position (i.e. strong vs weak?). This might be somewhat simplistic but is nonetheless worthy of consideration.

 

 

 

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