Business Level Strategy
4 Levels of Strategy: Types of Strategic Alternatives
4 levels of strategy (1) Corporate level strategy, (2) Business level strategy, (3) Functional level strategy, and (4) Operational level strategy.
Industry What is Industry
Organizations operate within an industry. The macro factors influence the industry and the behavior of competitors in the industry. While conducting the TOE analysis, the organization studies and analyses the industry structure (one of the determinants of industry profitability), competitor behavior, the nature of competition, and the industry life cycle. This analysis is useful to...
Industry Life Cycle
Industry Life Cycle shows the five stages in which industry goes through. 5 stages are; introduction or embryonic, growth, shakeout, maturity, and decline.
Competitive Strategy: Four Types of Competitive Strategy
The competitive strategy consists of the business approaches and initiatives undertaken by a company to attract customers and to deliver superior value to them through fulfilling their expectations as well as to strengthen its market position.
Combination Strategy: Align Businesses Strategically For Explosive Growth
Multi-business organizations adopt the combination strategy. Their various businesses may operate under different environmental conditions; have varying industry profitability and life cycles. Organizations must choose strategies that fit the environment, their resources, and their competitive position. It is possible to have different routes to growth within the broad grand strategy or have different strategies for...
How to Formulate Winning Strategies [9 Tips]
Formulating a winning strategy is not an easy task. If not carefully crafted, strategies may turn out to be highly disastrous. That’s why strategy-makers/strategists should follow several good strategy-making principles. Thompson and Strickland suggested 10 principles (they call them commandments) based on the lessons learned from companies’ strategic successes and mistakes. These principles or commandments...
Strategic Action Plan
A comprehensive strategic action plan should ideally contain the company’s vision and mission, strategic objectives, financial objectives, business strategy (i.e., enterprise strategy), functional strategies for various organizational functions, and possible actions to improve the predominancy of the company. Company Vision Company Mission Company Objectives:– Strategic Performance Objectives– Long-Term objectives Functional Strategies– Marketing– Production– Human Resources–...
Hierarchy of Strategy: Corporate, Business, and Functional Strategy
Corporate strategy is too broad to translate into line managers’ actionable plans. Transmission is facilitated by two sets of strategies – business and functional. This means the corporate strategy has subsets in business strategy which defines how an organization will compete, and functional strategy, which defines how the organization’s systems, processes, and functions will be...
Corporate Strategy: Meaning, Implementation, Elements
The corporate strategy aims at improving the attractiveness and performance of the diversified company’s overall business.
Cost Leadership Strategy (Low-Cost Strategy)
Cost leadership strategy is also known as ‘low-cost provider strategy’, or simply ‘low-cost strategy.’ We will use the term low- cost strategy’ in this book. The company that follows this strategy intends to become the overall low-cost provider in the industry in which the company operates its business. A company strategy of selling its products...
Differentiation Strategy: Definition, Types
Definition of Differentiation Strategy Differentiation strategy is concerned with product differentiation. It refers to making a company’s product different from the similar products of the competitors. Although there can be differentiation in services’ too, in this book, we would use the word ‘differentiation’ mainly to mean differentiation of tangible products. As a marketing terminology, differentiation...
Focus Strategy: Meaning, Types of Focus Strategy
Focus strategy concerns itself with the identification of a niche- market and launching a unique product or service in that market. A niche-market is a narrow segment of a total market. A niche can be identified based on certain issues: particular buyer group (such as women, youths, adolescents or aged 50+), geographic uniqueness (such as...
Best Cost Strategy: Definition, Examples
As a concept, Best-Cost means high quality and low price of a product. This term is used to indicate a situation where the company tries to achieve the best (lowest) cost relative to the competitors who offer similar products and simultaneously tries to improve quality. The best-cost strategy is the strategy of increasing the quality...
Fragmented Industry: Strategies For Fragmented Industry
A fragmented industry is related to an industry environment, quite different from the other three types of the industry environment. Thus, it cannot be included in the ‘industry life cycle‘ that includes emerging, maturing, and declining industry environments. Because of its uniqueness, we will discuss here the meaning of fragmented industry including its situational factors...
18 Strategic Options for Industries and Company
Strategic options are the alternative methods for formulating the business strategy for different market positions and setting action plans for success.
Declining Industry: Strategies For Declining industry
An industry is said to be a declining industry where demand for products of the firms in the industry grows more slowly than the economy-wide, average. In a declining industry, the demand continues to go down. Examples of the declining industry in the USA include; 6. DVD, game & video rental. Computer manufacturing. Recordable media...
Maturing Industry: Strategies for Maturing Industry
Managers should be able to understand the meaning and nature of a maturing industry. Knowledge about the maturing; industry would help them identify the fundamental changes that have occurred in the market environment. Understanding the changes would facilitate them to adopt appropriate strategic options in the industry. Keeping this background in view, following issues concerning...
Emerging Industries: Strategies For Emerging Industries
It is very challenging to operate business firms in an emerging industry. Before we proceed toward identifying the strategic challenges in an emerging industry, let us define it first. And, then we would explore the strategy-making challenges in the emerging industry, be followed by identification of possible strategies to pursue in the emerging industry for...
10 Commandments for Formulating Winning Business Strategies
Formulating a winning strategy is not an easy task. If not carefully crafted, strategies may turn out to be highly disastrous. That is why the strategy-makers should follow a number of good strategy making principles. Thompson and Strickland suggested 10 principles (they call them commandments) based on the lessons learned from the strategic successes and...
Complementary Strategies
Strategic Alliance Strategy
Strategic alliances are cooperative agreements between two or more firms to help each other in business activities for mutual benefits.
Vertical Integration Strategy: Advantages, Disadvantages, Types
Vertical integration strategy combines backward integration and forward integration. Vertical integration strategy expands business backward into the sources of supply and forward toward the users of the products. What is Vertical Integration? Vertical Integration is the degree to which a firm’s production system or service facility handles the entire supply chain. It is an arrangement...
Horizontal Integration Strategy
Horizontal integration refers to having ownership in competitors’ firms. When a company adopts this strategy, it purchases a firm that produces similar products in the industry. Many companies use a horizontal integration strategy as a growth strategy. This strategy is usually implemented through mergers and acquisitions. Combinations of two pharmaceutical companies, two sweater manufacturing firms,...
Joint Venture Strategy: Definition, Advantages, Difficulties with JV
A joint venture refers to a new organization established by two or more organizations. It is an agreement where two or more firms hold equity capital in a venture.
Mergers & Acquisitions: Meaning, Process, Example, Advantages, Disadvantages
Mergers & Acquisitions have become a common strategy to consolidate the business. The basic aim is to reduce cost, reap the benefits of economies of scale, and expand market share. For many people, mergers simply mean sharing resources and costs to increase bottom lines. However, it is not as simple as it sounds. According to...
Outsourcing Strategy: Streamline Business Activities With Outsourcing
Outsourcing strategy refers to a strategy of procuring raw materials or parts and components from suppliers or having any value chain activities performed by outsiders. A firm adopting an outsourcing strategy relies on outside vendors to supply products, support services, or functional activities. A firm may outsource production, assembling, marketing, delivery, accounting and finance, warehousing,...
Growth Strategy: Meaning, Pathways, Tips, Examples
Growth is one of the most discussed and lauded strategic options. It is equated with managerial success and achievement. An organization may grow by expansion (when it concentrates within a broad allied product market scope). Technology plays an essential underlying role in growth in today’s context. It enables companies to design, develop, and manufacture better...
Stability Strategy: Definition, Adopting, Pathways to Stability Strategy
Under the Stability strategy, a company where stops the expenditure on expansion, do not introduce new products or venture into new markets rather decides to focus of the current portfolio and market share.
Harvest Strategy
What Is Harvest Strategy? When future growth appears doubtful or not cost-effective, companies want to harvest as much as they can from the product. It limits additional investment and expenses and maximizes short-term profit and cash flow. When a company adopts a harvest strategy, it deliberately sacrifices its market position ‘in return for near-term cash...
Offensive Strategy
An offensive strategy consists of a company’s actions directed against the market leaders to secure competitive advantage. Competitive advantage may be achieved as a cost advantage or differentiation advantage or resource advantage. An offensive strategy must be creative so that competitors cannot easily thwart it. Offensive strategies include a dramatic reduction of price, a highly...
Defensive Strategy
A defensive strategy consists of a company’s actions directed for protecting its competitive advantage. A company pursues defensive strategies to protect competitive advantage through protecting existing market share. However, they can hardly create any competitive advantage. But they fortify the competitive position of the company. They also protect the resources and capabilities of the company....
First Mover Strategy: Definition, Advantages, Disadvantages
What is the First Mover Strategy? The first-mover arid late-mover strategies are related to the timing of strategic moves by an organization. Determination of the timing of strategic moves is important for every business organization. A firm may be the first mover in launching a strategy to gain a competitive advantage in the marketplace. Or,...
Late Mover Strategy
A firm can be said to have followed a late-mover strategy when it adopts a strategy of introducing a new product or entering a new market after the competitors have already done it. Being the late-mover means the firm is not interested in taking a strategic move first. The firm waits to see what happens...
General Electric Approach
General Electric introduced a comprehensive portfolio planning tool called a strategic business-planning grid. Like the BCG approach, it uses a matrix with two dimensions – one representing industry attractiveness (the vertical axis) and the other one representing company strength in the industry (the horizontal axis). The best businesses are those located in highly attractive industries...
Cut Back Strategies
Cut back strategies are those where the organization curtails or, in extreme cases, divests nonperforming assets, products, divisions. businesses, functions.
Diversification
Diversification: Definition, Levels, Strategy, Risks, Examples
Diversification means expansion of business either through operating in multiple industries simultaneously (product diversification) or entering into multiple geographic markets (geographic market diversification) or starting a new business in the same industry.
Corporate Strategies of Diversified Companies ( 7 Strategies)
A single-business company can diversify its business by adopting several strategies, such as a new venture, joint venture, or acquisition. This post will discuss strategies that a diversified company may adopt to strengthen its position and performance. 7 Corporate Strategies of Diversified Companies Once a company gets diversified, it becomes a critical obligation on the...
Expansion Strategies: 4 Strategies in Ansoff Matrix To Grow Business
The product market scope refers to the industries the organization confines. When an organization follows the expansion strategy, the marketing or the production function underlies some degree of commonality between the different businesses it operates. Expansion and growth result from concentrating the resources within the domain of one or more businesses allied in terms of...
Joint Venture Strategy: Definition, Advantages, Difficulties with JV
A joint venture refers to a new organization established by two or more organizations. It is an agreement where two or more firms hold equity capital in a venture.
Mergers & Acquisitions: Meaning, Process, Example, Advantages, Disadvantages
Mergers & Acquisitions have become a common strategy to consolidate the business. The basic aim is to reduce cost, reap the benefits of economies of scale, and expand market share. For many people, mergers simply mean sharing resources and costs to increase bottom lines. However, it is not as simple as it sounds. According to...
New Venture Strategy
A new venture strategy is also known as an ‘internal start-up.’ A new venture strategy encompasses diversifying into a new business by forming a new business unit. The newly-created business unit operates its businesses under the corporate umbrella. Creating a new company warrants various activities on the part of the management of the company. These...
Strategy Implementation
Strategy Implementation: 10 Strategy Implementation Tasks
Effective strategy implementation requires reallocating resources to ensure that relevant business-units have sufficient budgets to do their work successfully.
Competitive Strength Assessment
Systematic assessment of a company’s competitive position is essential in the analysis of the company. Competitive Strengths Assessment helps in assessing whether a company’s competitive position in the marketplace is strong or weak relative to close competitors. Through Competitive Strengths Assessment, a broad-based assessment is made of a company’s competitive position and strength. This step...
Strategic Cost Analysis To Outsmart Competitors💼🔍💥
Strategic cost analysis focuses on a firm’s cost position relative to its rivals. It involves comparing a company’s cost position relative to key competitors, activity by activity, from raw materials purchase to the price paid by ultimate consumers. A company must know how its costs compare with rivals’ costs. Usually, disparities in cost among rival...
Value Chain Analysis
Value chain analysis identifies the primary activities that create value for customers and related support activities. Value chain analysis is viewed as a means of evaluating a firm's strengths and weaknesses.
Total Quality Management (TQM)
TQM is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes.
Strategic Control: 3 Types of Strategic Control
Strategic control specifically aims at ensuring that the organization is maintaining an effective alignment with its environment and moving toward achieving its strategic goals.
Six Sigma: Quality Control Tools Used in Six Sigma
Six Sigma methodology improves any existing business process by constantly reviewing and re-tuning the process.
Strategic Change: 7 Steps of Strategic Change Process
Strategic change is viewed as the movement of a company away from its present state toward some desired future state to increase its competitive advantage.
Strategy Evaluation: Necessity, Requirements, Strategy Evaluation Framework
In fact, in strategy evaluation, managers review or appraise the progress in the performance related to strategy implementation.
Evaluating Strategies of Diversified Companies in 8 Steps
Whatever strategies a diversified company chooses for strengthening its position and performance, they should be properly analyzed and evaluated. Some systematic procedures need to be followed so that corporate managers can assess the potential and present caliber of the various business units under the corporate umbrella. Such analysis and evaluation would help them decide what...
Stakeholder Analysis
Organization’s challenge is to balance the needs of the different persons, groups of people and organizations that have some kind of stake or interest in the organization. They are called stakeholders.
Balanced Scorecard: A Tool for Strategic Control
Balanced Scorecard emphasizes “what cannot be measured cannot be improved” and the scorecard either measured quantitatively or qualitatively.
Framework for Institutionalizing Successful Change Programs
Institutionalization framework identifies organization characteristics, intervention characteristics, institutionalization process and indicators of institutionalization.
3 Components for Building a Capable Organization
3 Components for Building a Capable Organization are; (1) Developing competent personnel, (2) Competitive organizational capabilities, and (3) Dynamic organization structure.
Business Process Reengineering
Reengineering involves redesigning operations of organizations to avoid bottlenecks arid duplication of effort. In the traditional system, pieces of related activities in a business-process are performed in various departments. However, in reengineering, work-efforts are redesigned in such a way that all pieces of related activities are. performed by relevant employees in a group. All relevant...
Management by objectives (MBO): Meaning, Steps, Benefits
Management by objectives (MBO) is a systematic approach to focus the overall management activities and resources on set organizational goals.
