This question has two parts; be sure to answer both. First, summarize each of the three common grand strategies. Next, provide an example of how a company (real or hypothetical) might execute each strategy.

Question

What will be an ideal response?

Answer 1

These are the three common grand strategies:

1. A growth strategy is a grand strategy that involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. Sometimes a growth strategy is based on innovations in products or services; other times it is based on promotion and marketing. Example: A car wash can expand its offerings beyond simple car washes and begin offering waxing, polishing, and detailing. The car wash can also increase its promotion and marketing efforts to try to expand its market share. For example, it can place a coupon in local newspapers or ads in the local pennysaver.

2. A stability strategy is a grand strategy that involves little or no significant change. Example: A downtown family jewelry store that specializes in unique jewelry made with precious stones (such as emeralds, diamonds, and rubies) may decide it is very happy focusing on selling that particular type of product. Because there will always be a demand for precious stones and unique jewelry, the owners of the store can feel confident that a stability strategy will help them maintain their profits and competitive advantage over the long term.

3. A defensive strategy, or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. The company can reduce costs by freezing hiring or tightening expenses. It can sell off (liquidate) assets—land, buildings, inventories, and the like. It can gradually phase out product lines or services. Examples: In recent years, Sears has been contracting, closing off stores, and selling valuable real estate in prestigious downtown locations. Kmart has also been implementing a retrenchment strategy, closing many of its stores. In 2016, Macy's announced the closing of 100 stores.