The business strategies are alternative or courses of action showing the means, resources and efforts to be employed to achieve the objectives under optimal conditions. Through the strategies is proposed how to achieve specifically and in the best way the objectives. However at the corporate level four types of basic strategies are determined, which refer to the direction the company can take in terms of growth and output. These are:
More from Business Study Notes:- Types of ng Strategies
Must Use Types Business Strategies
- Growth Strategies
They consist in increasing the efficiency and control of all operations by conducting activities and processes normally carried out by other organizations outside the company. Integration can take place in three senses:
Forward. Its purpose is to achieve a high degree of control over distribution systems, for which the company produces, is also dedicated to distribute.
Backward. It is done to obtain greater control over the supply systems, i.e. the suppliers of the company, to avoid problems in the acquisition of the raw material, which is achieved when the organization produces its own inputs.
Horizontal. It refers to perform better control over the elements of competition, through alliances or strategic mergers.
- Intensive Strategies
Its purpose is to take advantage of the opportunities presented to intensify the penetration, the development of existing products, services and markets. These are used as a means of growth with sustenance’s in the diversification, when by the degree of development of the organization great possibilities of growth are found. The two intensive development strategies are:
Product development. It aims to increase competitive advantages by developing new products or improving existing, so that they become more competitive in markets that are proper.
Market development. Its purpose is to achieve an expansion of the company’s products through the penetration of new markets and / or niche markets.
- Consolidation Strategies
Its purpose is to achieve a balance between all the functional areas of the organization, through the integral economic and technological development of the company, thereby obtaining greater stability and development of the same.
- Diversification Strategies
They make sense when the company cannot find many opportunities for the future development of their products, or when opportunities in other branches are higher than current. There are three types of diversification:
Concentric. The purpose of these is to add a new product or service that is compatible with the product line that handles the company, using the type of technology, management style and existing resources.
Horizontal. Its basic function is to seek customer satisfaction current company, through a new product line, with no technological relationship with the products today.
Conglomerate. It applies when an overall diversification of the company is sought.
- Organizational stability strategy
One is performed analysis position comprising the mission review and evaluation directly from the opportunities that are presented to the company, in addition to assessing the risks, scenarios and return on investment. With this analysis the scale, profitability and market stability in relation to the degree of certainty regarding competition and the environment is determined.
- Shrinkage strategy
The concept of contraction or constro segmentation is the opposite of market segmentation; Refers to a review and evaluation of the segments established by the organization, in order to determine those that are profitable and unnecessary. As a result of this evaluation, the segments are grouped in such a way that the number of them is reduced, which does not mean that they disappear, but rather that they are grouped together.
The contraction is realized when the company has diversified a lot, and the costs of production increase or are dispersed; its purpose is to ensure that all market segments are profitable and fully satisfied. The advantage of implementing this strategy is that production costs are reduced by not having to manufacture a great diversity of products for each segment. The advantage is that there is a risk of losing consumers when withdrawing the product that satisfies them, even if this belongs to a captive market.
- Combined Strategies
When performance targets seeking enterprise not achieved with the implementation of a single strategy, re uses a mixture of two or more strategies, which requires special care so that these do not conflict. Sometimes the company pursues different objectives that cannot be covered by a single strategy, and it is necessary to mix or apply two or more strategies in order to optimize resources.