Different Types of Strategies in Business
The business strategies employed vary from one company to another. This is because they use strategies according to the challenges they are facing.
However, knowing the different types of strategies in business can help in answering various challenges in business.
Apparently, each business owner wants to surpass other competitors. That is why implementing business strategies is one way of having edge among other competitors. However, as a business owner you should understand the different types of business strategies that you can use in addressing the various challenges in your business. By thorough understanding you can use the appropriate strategy that is suitable to the challenges.
Types of Business Strategies
- Growth strategy – This strategy is used when introducing new products. Likewise, it can also be used if you want to add new features and improve existing products. This is very important in order to become more competitive otherwise customers will look for other company using new technology. This is true especially if you are into a business that needs constant updates of new technology such as cell phone business. Obviously, if you will not employ growth strategy you will be lost in the industry.
- Product differentiation strategy – Small companies that have competitive advantage are using the product differentiation strategy. This is made possible by offering superior quality of product and services. This means that companies should ensure that their products are entirely different from other competitors. In like manner, through this strategy a company can build brand loyalty.
- Price skimming strategy – Another strategy used by business owners is the price skimming. This strategy pertains to the high price charging of the product especially in the introductory phase. This is done to recover immediately the production as well as the advertising costs. However, it is important to ensure that the product stands out so that customers will not have second thought of paying the exorbitant price. On the contrary, price skimming also has the disadvantage in which it attracts further competition.
- Acquisition strategy – Most companies make use of acquisition strategy in order to obtain competitive advantage. This involves buying another company or product lines of a certain company.
- Merger strategy – Identical businesses that want to rationalize the sales and productions prefer to adapt merger strategy. This business strategy gives the opportunity to the merging company to take advantage with the benefits of large-scale operations.
Whatever business strategy you may use make sure that you fully understand how it works. It would help if you will seek help from business professionals so that you will know the type of business strategy that would work best in your business. Keep in mind that the success of your business partly depends on the strategy you implement. That is why you should ensure that your strategy will be effective.