Specimen standardised strategies
Specimen standardised strategies are nine different strategies that can be adopted, depending on market characteristics and corporate strengths. The diagram illustrates which approach should be used, depending on corporate strengths and the strength of market attractiveness.
What is it used for?
The model can be used for deciding which type of strategy to adopt, depending on corporate strengths and market attractiveness. It can be used to review company or business unit strategies, or review product portfolios.
How do I use it?
The selection of a specific strategy depends on the relationship between corporate strength and market attractiveness.
- Serious entry into the market – if corporate strengths are low and market attractiveness is high, it is thought that a positive market can be entered, and it should be fairly easy to pull out if things don’t work out.
- Limited expansion or withdrawal – when market attractiveness is medium and corporate strengths are low, it is recommended to seek out attractive opportunities that are of low risk to the business. The company should withdraw quickly if the option is not successful.
- Loss minimising – when market attractiveness and corporate strengths are both low, it is advised to withdraw quickly if there is the chance that loss will be unavoidable.
- Selective growth – when market attractiveness is high and corporate strengths are medium, investment should be made when it is possible to gain or maintain competitive advantage.
- Selective expansion – this is recommended when market attractiveness and corporate strengths are both medium, with the organisation expanding in areas that do not face much risk, but that are also profitable.
- Overall harvesting – when market attractiveness is low and corporate strengths are medium, a harvesting approach should be employed, to capitalise on the opportunity.
- Struggle – when both corporate strengths and market attractiveness are high, companies should focus on keeping strength and profits, or maintaining position.
- Maintenance of superiority – if corporate strengths are high and market attractiveness is medium, the focus should be on looking at production and making it more efficient.
- Limited harvesting – when corporate strengths are high and market attractiveness is low, it is thought that this approach should be adopted in order to protect profits.
What are its limitations?
The model has limitations, in that profitability and market attractiveness should not be the only factors considered. For example, personal or departmental creativity can be very important in determining strategy.
It is also important to recognise that different strategies can be adopted for different business units in the same company.
Other similar models