What are the types of business strategy?. Another common strategic path is extrapolation. This is the preferred method of management consultants. Analyze data, identify trends and bring them to their logical conclusion.
One of the most famous examples of reactionary strategy is when Microsoft realized that the Internet was being lost. In one of the most impressive management feats in modern history, Bill Gates reoriented his enormous company to the needs of a connected world and probably saved it. Strategic alternatives are long-term plans that companies develop to establish their direction. When establishing organizational direction, the availability of human and organizational resources will be taken into account and objectives will be established based on the availability of resources.
In general, methods of analysis such as SWOT will be used when building an organization's strategic alternatives. Once strengths, weaknesses, opportunities and threats are analyzed, the organization can decide what options it has to build the strategic plan that best suits the organization's success. In general, strategic alternatives are not established when an organization is functioning well. If an organization is not functioning well and if the management of the organization decides that it is best to restructure the organization, they look for strategic alternatives.
A strategy is a broad concept of any organization and can be used in different ways. There are four main types of strategic alternatives that can be identified. The strategy at the corporate level can be defined as the long-term goals and objectives of the organization that can generate an impact on all business units operating under an umbrella organization. If the company is a large group of companies with several sub-organizations under the parent company, strategies at the corporate level are developed for the long-term benefit of the entire suborganization.
The strategy at the corporate level provides a set of strategic alternatives among which the management of the organization chooses to continue and achieve long-term business operations in various sectors of the market and, possibly, in several industries. These identified strategic alternatives help the company to align its activities with the organization's vision and mission. In a classic Harvard Business Review article, Ansoff (195) identified four strategies for business growth. These four strategies also identify four basic types of marketing plans and the types of investments and activities associated with each of them.
Strategies are defined based on whether the focus is on new or existing products and on new or existing markets. When a company focuses on selling its current products to existing customers, it is following a market penetration strategy. The marketing activities that will predominate in this type of marketing plan are those that emphasize increasing the loyalty of existing customers so that they are not vulnerable to losing out to the competition, attracting competitive customers, increasing the frequency of using the product and converting non-users into users. Efforts to expand sales by selling current products in new markets are known as a market development strategy.
Such efforts may involve entering new geographic markets, such as international markets. Raising product awareness and developing distribution channels are key marketing activities. Some product modifications may be required to better meet the needs of the local market. For example, as fast food restaurants have moved to international markets, they have often changed their menus to better suit the dining preferences of customers in local markets.
Expanding to a new market with an existing product involves some risk because the company is not well aware of the new market and the company and its products are not well known in the market. The return on marketing investments in such a strategy is likely to be longer than in a market penetration strategy, due to the time needed to raise awareness, distribute and test the product. Creating new products to sell to existing customers, a product development strategy, is a common marketing strategy among companies that can leverage their relationships with existing customers. For example, American Express has been able to leverage its relationships with its credit card customers to also sell travel-related services.
Similarly, cable television companies have expanded their offerings to Internet and telephone services. Research and development activities play a key role in this strategy. The time needed to develop and test new products can be long, but once a product is developed, awareness, interest and availability should be relatively quick, since the company already has a relationship with customers. A product development strategy is also riskier than a market penetration strategy because it may not be possible to develop the necessary product, at least at an acceptable cost to customers, or because the product developed does not meet customer needs.
Strategy work focused on discovery Strategy work focused on experimentation Strategy work focused on transformation. Thirdly, the different types of marketing strategies (strategic management), the third is a business strategy. Increasing awareness through marketing communications and increasing availability through greater distribution are common marketing activities in these types of plans. .