Discover 7 Best Types of Business Strategy for Your Organization

Leaders must have a clear business strategy in today’s environment. Even the most innovative companies will struggle to succeed without clarity and purpose. A successful business plan must clearly define the organization’s goals, decision-making process and long-term goals. It should also consider the organization’s market and its major competitors to ensure that all decisions are taken with a holistic view of the current landscape. This will facilitate long-term success. After decades of research by business experts, they identified different business strategies that can guide an organization’s plans.

What is a Business Strategy?

Business strategy is a term that describes all of the steps taken by a company to achieve its goals, mission and vision. It is about understanding the objectives of the business, what they are, and how to achieve them.

This information can help business owners allocate resources and set priorities. The strategy creates a framework that keeps the team moving in the same direction when everyone understands it.

 Types of Business Strategy 

Business strategies can vary depending on the environment in which they are implemented and the specific operations of the organization. Business experts and institutions have identified several types of particular strategies. These strategies can be classified into distinct categories:

• Competitive Strategy 

A competitive strategy is also referred to as a business-level strategy. It deals with the corporate aspirations that are implemented within individual companies. It is essential to focus on how a business will compete against its competitors in the market while also achieving the goal of creating a sustainable advantage.

Michael Porter’s generic strategies have influenced the strategy. Cost-based strategy is one of them, as well as differentiation and focus strategy. The resource-based view is the efficient use of company resources to create a competitive advantage. RBV and the value chain concept are also essential influences on competitive strategy.

• Value-Based Strategy 

The value-based plan is one of the most successful business strategies. It’s based on the perceived value by consumers of products and services. The pricing here is not based on the cost of production. This business strategy is a good choice for companies offering advanced product and service features. Apple Inc. uses value-based pricing that includes four factors: willingness to buy, price, cost and willingness to sell.

• Acquisition Strategy 

A business may acquire or purchase another company to increase growth. The focus is not just on increasing sales or revenue for existing products and services. The acquisition strategy involves obtaining additional products, quality staff, funds, or assets. It also includes expanding the customer base and increasing market share.

• Functional Strategy 

A functional strategy focuses on the individual departments and their role in achieving the organization’s goals. It aims to increase the productivity of resources and develop competence within the different departments of an organization to gain a competitive edge. A functional strategy supports the competitive strategy of an organization in this way.

In marketing, human resources, finance, research, and department development, implement department development strategy focused on efficiency, productivity, pricing, logistics, product design, etc. To formulate a functional approach, it is essential to consider factors such as short-term objectives and their specificity, along with the level of involvement of managers.

• Customer Focused Strategy 

This type of business strategy is used by businesses to prioritize increasing customer satisfaction and retention. This strategy lets companies know the best campaigns and tactics to enhance customer experience.

• Business-Level Strategy 

Most people think of this type of strategy as a business plan. This strategy relates to how an organization plans to gain a competitive edge in its chosen market.

In most cases, business-level comprehensive strategies are combined with other types of strategy. For example, it helps align production and delivery processes to the plan. A strategy for innovation, aligned with the business plan, allows an organization to integrate new products or ideas into its plan.

A well-defined strategy should impact all departments and aspects of an organization. It must provide clear priorities and goals across marketing, R&D, and HR teams. Early on, a well-defined strategy can help organizations develop secondary processes such as forecasting and process management.

• Corporate Strategy 

Corporate business strategies are based on the mission or vision of an organization. It is implemented at the highest levels of an organization and strategizes based on the company’s core value proposition or essence. Corporate or organizational strategies are concerned with the values of the organization and the perceptions that stakeholders and other parties will have. Executives are the ones who identify new markets and different ways to expand an organization.

Conclusion 

A strategy that defines the organization’s goals, vision, and growth prospects will help companies make better decisions. It may be challenging to identify critical elements such as target customers, competitors, strengths and weaknesses, market needs, etc. With an intelligent business strategist, companies can successfully create value for their brands in the market. These tips can help you make the best business strategy for your business.