It is necessary to set strategies for all levels in the organization. First, the management should develop alternative strategies and evaluate them. Then, the management should select a set that is considered compatible at each level. Ideally, the set should allow the best capitalization on the organization’s resources and the opportunities that are available in the environment.
For most organizations, there are four primary strategies available. The strategies are growth, stability, retrenchment, and combination strategies. These strategies are also known as the Grand Strategies.
1. The Growth Strategy
The growth strategy is a strategy in which the organization attempts to increase the level of its operations. The growth can be in the form of more revenue from sales, more employees, or more market share.
2. The Stability Strategy
The stability strategy is characterized by an absence of significant change. In this strategy, the organization continues to serve the same market and customers, while maintaining the market share.
3. The Retrenchment Strategy
The retrenchment strategy is a strategy in which the organization reduces its size. This can be done by selling off product lines that are less profitable. Usually, this strategy is practiced in a declining environment.
4. The Combination Strategy
This strategy is the combination of two or more strategies that we have discussed above. For example, in this strategy, one part of the organization may use the growth strategy, while another part uses the retrenchment strategy.