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CMA Intermediate · Operations Management and Strategic Management · Formulation and Implementation of Strategy

A packaged-snacks company in Indore decides to keep its present product range, markets and market share unchanged for the next three years, making only minor efficiency improvements. Which grand strategy is it following?

The company is following a stability strategy, because it intends to retain its existing products, markets and market share and make only minor efficiency improvements. It is not enlarging its scope as in expansion, nor reducing or selling activities as in retrenchment or divestment.

  1. AStability strategyCorrect
  2. BExpansion strategy
  3. CRetrenchment strategy
  4. DDivestment strategy

Explanation

A firm that continues its current business, products and markets with only incremental changes is following a stability strategy. Expansion would involve increasing scope or scale, while retrenchment and divestment involve reducing activities.

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