Grand Strategy Matrix

Quadrant III

The quadrant three firms are operating in a slow growth industry with a weak competitive position. These firms are prone to further decline which may result possibly in liquidation. To avoid such situations quadrant three firms needs introduce drastic changes in almost all the areas of managing the company. The management has to change its philosophy and should necessarily adopt new approaches of governing the firm. The management should be willing to incur some extensive costs in the overall revamp of the organization.

Strategically retrenchment (assets reduction) would be the best option to be considered first. Secondly diversifying the overall business through shifting the resources should be evaluated as another choice (related or unrelated diversification). The final option is again divesture or liquidation.

Quadrant IV

The firms falling in quadrant IV are characterized as having a strong competitive position but are operating in a slow growth industry. These firms have to quest for the promising growth areas and to exploit the opportunities in the growing markets as they possess the strengths to instigate diversified programs in growing industries.

Ideally quadrant four firms have limited requirements of funds for internal growth whereas they enjoy the high cash flows due to the competitive position they are characterized for. Therefore, these firms can often hunt for related or unrelated diversification fruitfully. Due to availability of excessive funds quadrant IV firms can also pursue joint ventures.