Definition: Grand strategies are multi-tiered plans that span over several years and outline the organization’s business goal. These strategies define the direction of the business in the following years by, for example, increasing the profit, developing new business ventures, or wrapping up from any market.
Grand strategies are also known as corporate strategies or master strategies. These strategies help organizations choose the best long-term plan that is aligned with their objective.
Types of Grand Strategies
According to Michael Porter, there are four types of grand strategies:
- Stability Strategy: In this strategy, organizations maintain the current position and focus only on incremental improvement.
- Expansion of Growth Strategy: Here, organizations attempt for high growth as compared to previous expectations.
- Retrenchment Strategy: In this strategy, organizations wrap up a business unit or sell a part of it to achieve financial stability or focus on core activities.
- Combination Strategy: In this strategy, the organization can use any combination of the above-mentioned strategies to improve its performance.
Characteristics of Grand Strategies
- These are multi-year strategies
- They are not precise since they are a long-term plan
- They are adaptable to dynamic market conditions
- These strategies affect the whole organization
- Top management decides the grand strategies
Benefits of Grand Strategies
- Help businesses scale their operation
- Make a business more proactive
- Increase efficiency and profitability
- Provide the organization with a direction from which to proceed
- Help in decision making
Summary
Grand strategies are multi-year and multi-layered processes that help organizations decide the long-term planning needed to achieve a goal. These strategies are broad in nature and let businesses plan functional-level strategies and business-level strategies.