CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge
Bharat Agro Ltd has a business unit placed in the bottom-right cell of the GE nine-cell matrix, where industry attractiveness is low and business unit strength is weak. Which generic strategic stance is normally recommended?
A unit with low industry attractiveness and weak business strength lies in the harvest or divest zone of the GE matrix, so the firm should divest it or harvest cash from it rather than invest further.
- AInvest heavily to build market leadership
- BDivest or harvest the unitCorrect
- CProtect the position with selective investment
- DSeek to expand through acquisitions in the same industry
Explanation
In the GE matrix, cells with low attractiveness and weak strength fall in the 'harvest/divest' zone. Investing heavily is for the high-attractiveness, strong-position zone. Selective investment suits the diagonal middle cells.
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