1. Grand Strategies Provide overall direction for the company Deal with most important aspects of the company’s operations –Products the company will manufacture and services it will provide –Number of employees it has –How much money the company will spend on salaries and benefits –How the company will market its products to consumers and other businesses Developed at the highest levels of the company Four types: growth, stability, retrenchment, combination

2. Grand Strategies Growth strategy –Plans developed when a company tries to expand sales, products, or number of employees Concentration strategy Vertical integration Diversification

3. Grand Strategies Stability strategy –Plan to keep the company operating at the same level that it has for several years Used when a company is satisfied with its profits and not seeking growth Company growth is possible, but will be very slow

4. Grand Strategies Retrenchment (defensive) strategy –Plan to reverse negative trends in a company Such as losses in sales or to reduce its costs –Used to overcome a crisis or problem (competition) Turnaround: regain success Divestiture: company sells some part of its business Liquidation: entire company is sold or dissolved

5. Grand Strategies Chrysler corporation was on the verge of bankruptcy when it hired Lee Iacocca as their new CEO. He let go of a large number of employees and closed 20 plants. Remaining workers agreed to give up part of their salaries and benefits to save the company and by 1982 Chrysler began to show profit. What kind of strategy did Iacocca implement? Turnaround Strategy

6. Grand Strategies Combination strategy –A plan that employs several different strategies at once –It’s possible that all issues cannot be addressed by implementing just one strategy –Managers must establish priorities or the competition will gain an advantage –Coca Cola, 1989 Divested and expanded at the same time