Question

A stability strategy is a grand strategy that involves little or no significant organizational change. For example, Love Forever is a jewelry store that sells only one type of item: engagement and wedding rings. The management of Love Forever does not plan to branch out into selling different types of jewelry; the company has a reputation for being the go-to store to purchase wedding rings, and it plans to maintain that strategy.

a) true
b) false

Answer 1

True

Step-by-step explanation:

A stability strategy like the question suggests, is a form of grand strategy that involves little or no deviations in terms of organization, products and sometimes the customer base. A stability strategy involves more consolidation and less expansion.

In the case study listed above, Love Forever, a jewelry store, decides to stick with its strategy of selling only engagement and wedding rings. This is an example of a stability strategy because the company has decided to consolidate rather than expand and has decided to double down on its reputation of being a go-to store for couples who intend to get married.

Stability strategy are sometimes synonymous with small businesses who don't have access to huge capital or who don't want to access capitals from investors or banks for various reasons.

Answer 2

The correct answer is True.

Step-by-step explanation:

A stability strategy seeks to remain as long as possible in the maturity phase (or stability) of the company, reaping the fruits of the investments made. A survival strategy seeks to survive in a hostile environment, while retaining its market share.

In general, stability and survival strategies are defensive strategies, that is, strategies that seek to maintain the competitive position achieved by the company. This fact does not mean that the company cannot grow; in fact, on many occasions, to maintain market share growth is necessary (sustainable growth). In other cases, these strategies involve a decrease (organizational downsizing, outsourcing or outsourcing of activities).

These strategies are designed for the level of corporate strategy, although they can also be adopted for competitive or business strategies, as they allow the analysis for each business or activity to which the company is engaged.