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Business Strategy

A business strategy is formulated by selecting the target audience of the product and assembling the marketing mix. A firm can assemble marketing mix elements in many different ways so that the relative weight of the different elements will be different in the different combinations. Because of this reality, business firms are employing an abundance of strategies and strategy stances. It is a relentless race to stay ahead of competition.

Basically, however, there are only two broad routes available for forging business strategies. They are the price route and the differentiation route. In other words, any strategy has to be ultimately either a price-based strategy or a differentiation-based strategy.

Companies taking the price route compete on the strength of their pricing and the price cushions they enjoy. Normally, those who resort to the price route and compete on price will enjoy substantial cost advantages, giving them flexibility in pricing and marketing. The differentiation route, on the other hand, revolves around elements other than price. The product with its innumerable features is one major source of differentiation. In fact, any of the ever-so-many activities performed by the business unit can constitute the nucleus for differentiation.

In other words, differentiation allows the company the freedom and flexibility to fight on the non-price front. Differentiation, therefore, is a crucial option for a firm in its search for a rewarding strategy. A good majority of business battles are in fact fought with a differentiation-based strategy rather than a price-based strategy.

As already mentioned, a business unit that opts for the price route in its competitive battle will enjoy certain flexibilities in the matter of pricing of its products, and use price as the main competitive lever. It will price its products to suit varying competitive demands. It will enjoy certain inherent cost advantages, which permit it to resort to a price-based fight.

Strategy Games

In the marketplace, different firms take different strategy stances. This is but natural. As long as their situational designs and consequently their specific requirements of strategy differ from each other, they will evidently follow different strategy stances. One firm may find it appropriate to have a direct confrontation with the market leader; another may find it appropriate to keep aloof for some time from the heat of competition; the third may find it relevant to chalk out a strategy of sheer survival. It is essential to understand that there is no universally valid strategy stance. It is so because the various firms do not share the same situational design.

Companies draw relevant elements and forge unique strategies to suit their unique situational design and relative position in the industry. Broadly, these strategy stances can be classified under three heads- offensive/ confrontation strategy, defensive strategy and niche strategy.

Offensive strategy, also known as confrontation strategy, is as the name indicates a strategy of aggression/confrontation. A firm that is not presently the leader, but aspires to leadership position in the industry, usually employs an offensive strategy. The crux is that the firm adopting an offensive strategy automatically assumes the position of the challenger; the leader, mostly, is its target of attack.

A defensive strategy is usually employed by the leader who has the compulsion to defend his position against the confrontation of powerful existing competitors or strong new entrants trying to dislodge the leader from his topmost position. The leader's concern is, how best can I defend my position? The leader cannot assume that its position in the industry is safe and its job easy. It has to maintain constant vigilance and defend its position against the attack of the challengers, because in any industry challengers keep appearing.

A firm practicing the niche strategy neither confronts others nor defends itself. It cultivates a small market segment for itself with unique products/services supported by a unique marketing mix. These segments will be too small to attract big competitors. Normally, smaller firms with distinctive capabilities adopt a niche strategy.

Strategic Planning

Strategic Planning entails the making of schemes to be adhered to by an entire organization. This pertains to the entire organization's achievement and progress over a certain period of time in the future. It also takes into account the way industry conditions change with the times - in areas such as technology and communications.

The particular nature of the organization, as brought out by its leadership, its culture, complexities in its environment, its size and other specific aspects prevalent there, determine its Strategic Planning mode. Thus, there arise a number of models, approaches and perspectives of Strategic Planning. These may be based on goals or issues or other criteria.

An organization's planners may well know the components of a Strategic Plan. Still, in order to clarify and elucidate the organization's plans and verify that the individual plans of the key persons concerned comply with the common plan, the Strategic Planning process is well worth considering. Strategic Planning serves many purposes:

  • It helps cultivate a feeling of ownership of the plan among the participants in planning.

  • It helps bring focus on the key priorities of the organization, and thereby ensures the most optimum effective use of the organization's available resources.

  • It sets and establishes realistic and achievable goals for a period of time in keeping with the organization's capacity.

  • It forwards such goals and objectives defined to every constituent of the organization. Following these, progress can be measured from time to time.

  • It redefines the organization's purpose.

  • It establishes a mechanism for informing about changes in goals and objectives, when made.

Strategy Management Best Practices Training Course

Strategy Management Best Practices Training Subjects:

Value Creation Models & Methods A-Z , What is Value Based Management? What is Performance Management? Why Value Based Management? Strategy, global, planning, Balanced Scorecard Kaplan Norton, Internet, eCommerce, 80/20, Boston matrix, quick-wins, tactics, sustainable competitive advantage, Merger and Acquisition (M&A), best practices, implementation, analysis, 3C's model Ohmae, 7 Ps Booms Bitner, 7-S Framework McKinsey, ADL Matrix Arthur D. Little, Ansoff product/market grid, Acquisition Integration Approaches Haspeslagh Jemison, Boston Consulting Group, BCG Matrix, Blue Ocean Strategy Kim, Business Assessment Array, Competitive Advantage framework, Core Competence Hamel Prahalad, Cost-benefits analysis, Extended Marketing Mix 7P's, Industry Life Cycle, Kaizen philosophy, Learning Organization, Managing for Value MfV Insead, Outsourcing, SWOT analysis, Strategic Alignment Venkatraman, Strategic Intent Hamel Prahalad, Strategic Stakeholder Management, Strategic Triangle Ohmae, Business Intelligence. Check:

  1. Training Workshops: Business Strategy Management Course
    Planning, implementing and managing business strategies

  2. Business Strategy Management Course - Online Distance Learning
    Planning, implementing and managing business strategies





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