Accordingto the retrenchment strategy that basically reflects the down sales and poorprofit which leads to the loss.
But comparing the theory to the GSM scenario,its annual report shows the positive growth range of sales, profit and the netassets which has been stepped forward uniquely. So by considering about theabove stated facts it can be assured that the GSM are practicing the Growthstrategy. Following aspects will deeply explain how and why GSM is practicingthe Growth Strategy.PossibleAlternative Strategies Relating to Substantive Growth, Limited Growth, orRetrenchment for GSMFocusingon the fact that the organisation should attempt all possible ways to expandits business globally, there are different methods and ways that can beemployed (Kelly, 2009; Manzini and Ponsatic, 2006). Those strategies may focuson market entry, such as merger, acquisitions, and joint venture. Franchisingand organic growth are other types of the market entry strategies. Thesubstantive growth strategy includes horizontal integration, verticalintegration, and diversification.
The limited growth strategy involves marketpenetration, market development, and innovation. Finally, the disinvestmentstrategies include retrenchment and divestment. We will discuss some of thosestrategies in the following texts. Recommendations for GSM1- SubstantiveGrowth Accordingto Thompson (2010) one can notice that the substantive growth strategy isbasically, implemented through two basic elements; merger and acquisition.However, merger is such combination of two separated companies, may be more orless in partnership equality.
Looking at the status of GSM, the matter is clearthat it has such potential in order to implement merger as a criticalsubstantive growth strategy. The reason beyond is its appeared market strength.Moreover, acquisition includes one company that takes over an ownership ofanother one (Alkhafaji, 2003). Hence, the substantive strategy can as well beimplemented by GSM, simply because of its potential power related to its marketshare in such valuable industry. 2- Marketentry However,checking the case study of GSM, one can note that it is a joint venture, asadmitted by its Management Director. To shed the light on the joint venture,Thompson (2010) specified it as such limited growth. Hence, two organisationscan share the included ownership.
Negatively vision, such joint ventureincludes a competitive advantage which is absolutely, narrow. Still one advisesGSM, not to follow the old strategy of such limited growth. The reason islinking to its strength in share at markets.
Not recommended for GSMAsto the retrenchment strategy, it is common to be considered as a remedial planthat in turn, can be taken at the inefficiency stage, strong competition, oreven economic recession. Investigating the inefficiency case, the involvedcompany should consider three strategies of retrenchment, assets reduction,cost reduction, and revenue generation. However, one cannot recommend suchstrategy for GSM, and as well as criticize the decision of the CompetitionCommission to sell the assets in India. The influence of such suggestion willbe risky on the industry as a whole, and on GSM, as a special. Once again,limited growth (the recent strategy of GSM) is not recommended. (Google, 2014) 6. Select appropriate future strategy for the organization Choosingsubstantive strategy and interactive strategy for GSM.
Therefore, the AnsoffMatrix can assist the company in selecting and implementing its strategy. As tothe substantive strategy, the company should pay attention to the vertical andhorizontal integration, linking to the unrelated diversification. Hence, thesubstantive growth strategy is applied within merger, acquisition, or evenjoint venture. As to the horizontal integration, it will happen as soon as GSMacquires or even merges with any other competitor or minimum anotherorganization operating during similar period in the value chain technique. Theboth companies may appear well to different market sections, apart from theirdirectly, compete. Hence, it may apprehensive actually, with some matters ofthe critical mass. Asto the vertical integration, it may happy as soon as the company becomesindeed, its own distributor or supplier.
Diversification happens when theorganization aims at making new service or products for its new accessedmarkets. On the other hand, while referring to the appropriate future strategyfor the case study, one should pay attention to the human resources (Armstrongand Brodie, 1994; Barney, 1995; Campbell, 1999). For GSM, its human resourcesare the key asset that can in turn, paving the road for achieving itscompetitive advantage and sustainability. GSMin fact, has identified the requirement for further innovation and developmentof the requirements of its stakeholders, in particular those employees whoattempt all possible ways to meet the company’s mission and vision. This canassist GSM for great extent in the process of turbulent markets place. Inaddition, such skill development and training providing to the involvedemployees will push the company towards its quality service and win itscompetitive advantage, simply thorough those available resources, as urged byWilson and Gilligan (2005).
Interactivestrategy is recommended, as well for GSM that can be considered the futurestrategic attitudes of this company, simply due to the rationale beyond thesestrategies that are aiming at competitive advantage within considering thecompetitors’ strategies. Linking to such fact, GSM should consider qualitystrategies, interactive price, interactive strategies, cooperative strategy,and game theory in such hyper-competition. On the other hand, according to thetheme of interactive quality and price, the involved strategies suggested forGSM should make all appropriate methods to offer best prices and highestquality to its loyal customers.
Most importantly, such interactive strategiesin the hyperactive competition will clarify the way by which GSM can strongly,face such competitions and arrive at the planned competitive advantage. Thegame theory, however, will help gaining competitive advantage for GSM. Suchtheory is a reaction for the competitor movements of the markets (David, 2004;Frisendal, 2012). Finally, the interactive strategies are best technical toolsthat should be selected and implemented by GSM. Franchising is as well avaluable strategy for keeping and getting more customers. It is such marketingprocedures by which, GSM can make a reputable image in the eyes of itscustomers regarding the unique services and products offered to them.
Franchisingaccording to many experts is seen as a method for repartition of services andproducts which can fulfil the expectation of customers. Still one should admitthat Ansoff’s Matrix is a valuable method, by which GSM can creatively,identify the available opportunities in order to develop its products andservices’ ranges. However, the basic types of the strategies which GSM canfollow are the substantive growth mainly through products development, themarket development and as well as vertical integration and diversification. Therefore,employing the technique of Ansoff’s Matrix will assist GSM for greater extentto figure out whether it should seek new customers for the existed services andproducts, suggest more services and products in order to provide them to theloyal available customers, or even stay with the available products andresources in order to gain more market shares.
Moreover, by the assistance ofthis matrix, GSM can consider the involved risks to find out many options toovercome them.