Types of strategies

From CEOpedia | Management online

Basic organization strategies Depending on the organization in which the strategy is created and used, the following types can be distinguished:

  • 1. An enterprise level strategy shaped by the top management that oversees the activities of an organization that deals with more than one type of business. It deals with the activities undertaken by the organization as a whole and those that it should cover, and strives to define the role that each of the various activities should play and should play.
  • 2. The strategy at the operational unit level serves to control the interests and activities of a specific, single business unit. Strategic business unit groups within the framework of a multi-branch enterprise all kinds of economic activities, aiming at the creation of a specific type of product or service and treats them as a single operational unit.
  • 3. The strategy at the functional level creates a framework for managing such functions as: finance, research and development, marketing, ecology, in accordance with the strategy of the operating unit. This strategy consists in determining how a given function is to be implemented in order to foster the desired competitive advantage and to coordinate a given function with other functions.

Innovation strategies

  • 1. Blue Ocean Strategy - based on the concept that when selecting a company's strategy, the area of ​​the most ruthless competition, often referred to as the "red ocean", may be omitted. Such action allows you to draw a "blue ocean" in which there is a possibility to designate a place for the company's strategy. The pioneering of the blue ocean strategy is conditioned by the application of the concept of innovation in the area of ​​the value that separates the market segment dedicated to new products. In the sphere of novum, the value of raising the product quality in the eyes of the consumer and the reduction of production costs are part of the company's strategic goals.
  • 2. Innovation Network Strategy - concerns merging all entities (i.e. trade organizations, social organizations, enterprises, logistics organizations and other subjects representing the global economy) into the configuration of a network of mutual relations. Network systems form the basis for specific business missions.
  • 3. Innovation niche strategy - is used by small and medium-sized enterprises focused on the systematic production of both product and technological innovations. It is one of the variants of the niche market concept. It arises when one of the companies gains a market advantage over the competition thanks to the use of new products secured with appropriate patents and unique technologies.
  • 4. Innovation cluster strategy - is based on the cooperation of plants and institutions supporting them, specialized in a specific field, located in the immediate vicinity in order to create a market advantage.
  • 5. Open innovation strategy - based on searching for and using the ideas of innovations created in an environment that is not formally related to the plant. The company organizes an open competition with a result chosen by specialists from a diverse group. Thanks to this solution, specialists representing various market segments have the opportunity to cooperate, which increases the chances of selecting highly effective, most innovative solutions. A necessary requirement conditioning the use of the innovation strategy is the public cooperation of users of articles involved in the design and assessment of innovation with the company.

Comparison of the basic types of enterprise strategy

Aspect Corporate strategy Strategies SJG Functional strategies
  • the choice of which business areas should be located in the enterprise
  • enterprise development strategy
  • choosing which products and services and on what markets should be sold,
  • SJG development strategy
  • determination of the target market,
  • the width and depth of the assortment,
  • product brand policy,
  • recalling products
Goals and tasks
  • aggregated goals of the company's operations (e.g. development, profitability, earnings per share)
  • limited by the company's goals,
  • aggregated around products / markets (e.g. sales growth, profitability, cash flow)
  • limited by the company's goals and SJG,
  • aggregated around a specific product / market (sales, market share, buyers' satisfaction)
Resource allocation
  • allocation between SJG areas of activity
  • allocation between functional departments working for various areas of the company's activity (e.g. research and development)
  • allocation between products / markets within a given SJG,
  • allocation between functional departments within the SJG
  • allocation between marketing mix instruments for each product / market
Sources of competitive advantage
  • mainly thanks to financial and human resources, better organization and management, synergistic effects
  • mainly thanks to the competition strategy, competences in a given SJG in relation to competitors
  • mainly due to the effective placement of the product on the market, the superiority of one of the elements of marketing in relation to the actions of competitors
Main decision areas
  • financial policy,
  • organization matters,
  • diversification of activities.
  • technologies
  • price policy,
  • promotion,
  • shaping stocks

Other types of strategies

Examples of Types of strategies

  1. Cost Leadership: This strategy involves being the lowest-cost provider in the industry. Companies that employ this strategy often produce large quantities of products, invest in the latest technology, and create economies of scale. An example of this strategy is Walmart, which has been able to become the largest retailer in the world by offering products at the lowest prices.
  2. Differentiation: This strategy involves creating products or services that are unique and superior to those offered by competitors. Companies that employ this strategy often focus on innovation and product design, and employ the latest technologies to create a unique product or service. An example of this strategy is Apple, which has created a portfolio of innovative products and services that are seen as superior to those of its competitors.
  3. Focus: This strategy involves targeting a specific customer segment or geographic area and providing specialized products or services to that segment. Companies that employ this strategy often focus on understanding the needs of their target customers, and then create products or services that meet those needs. An example of this strategy is Netflix, which has focused on providing streaming services to its target customer segment.
  4. Vertical Integration: This strategy involves controlling the entire production process, from the raw material to the finished product. Companies that employ this strategy often look to control their costs and reduce their reliance on suppliers. An example of this strategy is Tesla, which has invested in creating its own vertical production process, from the raw materials to the finished product.

Advantages of strategies

Introduction: Here are some of the advantages of different types of organizational strategies.

  • Market Penetration: Market penetration is a strategy where a company seeks to increase its sales and market share by increasing its presence in the market. The advantages of this strategy are that it can be implemented quickly, it is relatively inexpensive, and it can help a company gain a competitive advantage.
  • Product Development: Product development is a strategy in which a company introduces new products to its existing markets. The advantages of this strategy are that it allows a company to diversify its product offerings, it can help to increase customer loyalty, and it can open up new markets and revenue streams.
  • Market Expansion: Market expansion is a strategy in which a company seeks to increase its market presence by expanding into new geographic areas or markets. The advantages of this strategy are that it can create new opportunities, it can increase a company’s customer base, and it can help to increase sales and profits.
  • Diversification: Diversification is a strategy in which a company seeks to enter new markets or industries. The advantages of this strategy are that it can help to reduce risk, it can open up new revenue streams, and it can help to increase market share.

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