Types of strategies

Types of strategies
See also
Strategy variants Internationalization Importance of marketing strategy Revenue center Functional strategy Concentration strategy Related diversification Strategic position Distinctive competencies

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
Range	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	designing of the production system, assortment policy, market development. distribution policy	price policy, promotion, shaping stocks

Other types of strategies

• BATNA strategy
• GRIT strategy
• Luke Knowledge Strategy
• Strategy of the blue ocean
• The strategy of prestigious prices
• Defensive strategy
• Information strategy
• Concentration strategy
• Follower's strategy
• Pull strategy
• Strategy for the development of information systems
• General and target market strategy
• Social engineering 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 Types 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.

Limitations of Types of strategies

Organizational strategies are important for any business to implement in order to reach their goals and objectives. However, there are limitations that should be taken into account when developing these strategies. The following are the limitations of different types of organizational strategies:

• Mission statements: A mission statement should be clear and concise while providing a clear direction for the organization. However, it can be difficult to create a mission statement that is meaningful and relevant to all stakeholders.
• Goals and objectives: It is important to ensure that goals and objectives are realistic and achievable. Otherwise, they can be too difficult to reach or not beneficial to the organization.
• Action plans: Action plans can be difficult to implement if the goals and objectives are too broad or difficult to measure.
• Strategies: Strategies should be tailored to the specific needs of the organization and the environment in which it operates. Poorly planned strategies can lead to a lack of focus and direction.
• Resources: Resources can be limited and therefore organizations must be careful in how they allocate them in order to maximize the potential benefit.
• Communication: Communication is key to any successful strategy and organizations need to ensure that information is communicated effectively to all stakeholders. Poor communication can lead to a lack of understanding of the strategy and confusion.

Other approaches related to Types of strategies

Introduction: There are many types of strategies that organizations use to achieve success.

• Market Penetration Strategy – This strategy is used to increase the market share of an existing product or service by increasing the sale of existing products or services to existing customers.
• Product Development Strategy – This strategy is used to create new products or services and enter new markets.
• Diversification Strategy – This strategy is used to enter new markets or industries by introducing a new product or service.
• Merger and Acquisition Strategy – This strategy is used to acquire another business or merge with another business to gain competitive advantage.
• Cost Leadership Strategy – This strategy is used to reduce costs and increase profits by using economies of scale and low cost materials.
• Differentiation Strategy – This strategy is used to differentiate a product or service from its competitors by offering unique features and benefits.

In summary, there are various approaches to organizational strategies that can be used to achieve success. These include market penetration strategy, product development strategy, diversification strategy, merger and acquisition strategy, cost leadership strategy, and differentiation strategy. Each of these strategies has its own advantages and disadvantages and should be chosen based on the specific goals and objectives of the organization.

References

• Visnjic, I., Neely, A., & Jovanovic, M. (2018). The path to outcome delivery: Interplay of service market strategy and open business models. Technovation, 72, 46-59.
• Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.
• Suder, G. (2015). Regional trade agreements: Non-market strategy in the context of business regionalization.