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Understanding the business strategy is about understanding the direction of the business, how will it look like in the coming future? Business strategy helps in identifying and developing business plans and growth plan to achieve the business objectives. Thus, business strategy is the process which helps in achieving the desired business objectives. Business strategy is both short term and long term, but most of the time it is described as a long term business planning. It is defined as a document which can articulate the direction where a business is likely to function in order to achieve its goals. Business strategy includes long term action planning which is designed to achieve predetermined goals or objectives. Strategy is a game plan of the management which is applied to strengthening the organizational performance. Business strategy identifies how the business should be conducted in order to achieve the common organizational goals. Without business strategy, business has no direction to operation. Business strategy is an effective approach for strategic management.
Business strategies give the company a competitive advantage over its competitors in the market. Every organization has its own unique business strategy which makes it stand out of clutter in the competitive market. Every organization pays a lot to drive innovative business strategies to attract customers in the market. Company’s business strategy deals with major resource issues such as finance collection for a new project, investment in the market etc. Business strategy follows the assessment and integration. A company can undergo many business strategies depending on the place, time and situation. For example, the company who has just entered into the market may have to face more challenges then those who are established already. So, both the companies can have different set of business strategies. There following types of business strategies which are usually implemented by almost ever company.
- Growth Strategy: The growth strategy introduces new products or adds new features to the existing products. A small company can modify its own product line to be in competition, or the customers may move to other company. For example, the smartphone companies keep on adding new features and bring innovations to their products by their innovative strategies. So, in order to be in the line, the companies need to modify or bring changes in its products every time or they won’t stay longer in the market.
- Product Differentiation Strategy: This product strategy is often used by small companies during competitive advantage situations. It may include superior quality or better service. For examples, during the time of competitive advantages, the smartphone companies can attract its customers with their superior design engineering. So, with help of unique product differentiation strategies, companies set them apart from its competitors in the markets.
- Acquisition Strategy: This strategy is also used to gain competitive advantage. Small company goes for this strategy with extra capital including, purchasing another company or purchasing product lines. The companies often look forward to expand their business to different locations. So, with acquisition strategy, a company can purchase a comparable business chain in different location for its business expansion.
- Cost Strategies: Successful retail giants such as Wal-Mart and Costco give lots of benefits to its customers in the form of lower prices. These companies economically excel at offering better products at low prices to their customers. Cost strategies include cost leadership or low cost operation.
- Focus Strategy: This type of strategy is an amalgamation of product differentiation strategy and cost strategy. With help of focus strategy, a company can operate in a particular market better than anyone else as it includes better understanding of cost and product. According to this strategy, a company is effective in both understanding the cost as well as good at product or service differentiation.
An effective business strategy implementation framework includes assessment and integration including a measurement component. It is derived from the goals and objectives which are set to target the organizational missions. These objectives are divided down by business units and time measured to achieve them. The future goals of the company are assessed with the present progress with help of business strategy. The strategic analysis process is repeated if it is found that the progress report is not according to the determined target accomplishments.
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