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THE APPLICATION OF GRAND STRATEGY AS A STRATEGIC TOOL FOR ORGANISATIONAL POSITIONING

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND INFORMATION OF STUDY

Until recent times, the attainment of organizational positioning in a business industry that is the capacity of an organisation to produce desired results with minimum expenditure of time, money personnel and material, depended on the intuition of business owners or managers. Such intuitions were usually based on the past experience or “human” of owners or top manager which could bring about a level of organisational positioning. Although, some of these intuitive decisions worked for sometime. It was been observed that as the organisation increases in size and the business environment starts to experience rapid change as a result of the influence of various external factors. Hence, managers intuition is simply not suitable though to attain organisational positioning.

The differences between what the organisation aspires to do to take advantage of its opportunities and what it actually does is referred to as performance gap. This may be due to the success of competitors, government regulations or new technological break thoughts. When a gap is perceived the decision maker looks for the reasons and searches for alternatives solutions by making use of creative approaches, brainstorming or giving preference for active or passive strategies. There is therefore the likelihood of considering a change in strategy in relation to the gap in order to achieve the desired outcomes in the future with the two strategy. company strategies which are refereed as grand strategies are stable growth strategy, growth strategy, retrenchment or turn around strategy, combination strategy.

1.2    STATEMENT OF RESEARCH PROBLEMS

What necessitated this research is the fact that in today’s dynamic business environment, were intuition and guesses have become highly inadequate to match the purpose of attaining organizational positioning. The need for a better systematic and more predicable approach is required such approach can only be verified by a study which proves the existence and strength of the relationship between grand strategy and organizational positioning.

1.3    SCOPE OF THE STUDY

This study will examine two grand strategies in financial institutions within the Lagos metropolis. These strategies are growth strategy and retrenchment or turn around strategy. two banks are selected for this study. They are Intercontinental Bank Plc and Platinum Habib Bank Plc (Bank PHB). This examination will revolved around how the chosen strategies help the selected organisations position themselves in dynamic business environment.

1.4    RESEARCH QUESTIONS

The following questions will be answered at the end of this study:

i.  Is there a strong relationship between growth strategy and organizational positioning?

iii. Does merger plan enhance credit and rating position of an organization.

iv. Can merger be responsible for diversification operation.

v.  Can growth strategy be responsible for market positioning.

vi. Is there a strong relationship between growth strategy and improvement product sales.

1.5  RESEARCH HYPOTHESIS

Hypothesis I

H0: There is a positive significant relationship between growth strategy and retrenchment and organizational positioning.

Hypothesis I

H0: There is a no significant relationship between growth strategy and improvement in product sales.

Hypothesis III

H0: Growth strategy is not responsible for market positioning.

1.6  OBJECTIVES OF THE STUDY

The general goals to be achieve in this study:

1. To reveal that organizational positioning is attainable in today’s dynamic environment.

2. To prove that growth strategy and retrenchment play a crucial role in the attainment of organizational efficiency.

1.7   SIGNIFICANCE OF THE STUDY

The study will focus on the application of grand strategies focusing on growth and retrenchment strategy as a tool for organizational positioning.

1. This study is significant because it would reveal empirically, the relationship between grand strategy and organisational positioning.

2. It would also reveal to organisations, the possibility of attaining organizational efficiency through growth and retrenchment strategy.

3.  It would enable organisations to adequately match their limited resources to the dynamic environment.

4.  Source of information for further research

5. This study will reveal how grand strategy can serve as a benchmark for the attainment of high level of organizational positioning.

1.8  DEFINITION OF KEY TERMS

1. Strategy: A pattern of organizational moves and managerial approaches used to achieve organizational objectives.

2. Grand Strategy: These are types of strategic alternatives that could help an organisation to fill the gaps or take advantage of the opportunities that faces the firm.

3. Organizational Efficiency: The capacity of an organisation or business to produced desired results with a minimum expenditure of resources.

4. Market Share: Is the percentage of the entire target market that the organization has secured.

5. Profitability: The ability of an organisation to generate profit.

6. Environment: Is the combination of factors, both internal and external to the organizational which influence the activities of the organisation directly.

7. Corporate Strategy: Is the major strategy for the entire organisation.

8. Intuitive Strategy: A non-systematic strategy that is based on the judgment of business owners or managers.

9. Stable Growth Strategy: it is a strategy that all owe a company to concentrate its resources where is will develop a meaningful competitive advantage. 

10. Growth Strategy: This is a strategy that allows a company to do what it has been doing the way it has been doing it.

11. Retrenchment: This is a strategy of last resort because it is the hardest to follow. It denotes failure hence it is seldom used.

12. Combination Strategy: This strategy applies several grand strategies to different parts of the firm. It means, fit it different strategies to different environment.

13. Organizational Positioning: It is a process of implementing continuous improvement competency levels to ensure achievement of business objectives and alignment to culture and employer of choice strategies.

14. Backward Integration Strategy: It is a plan where the firm giters the business of supplying part of the firm’s inputs usually to ensure component quality, on time delivery or stable price.

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