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Let’s Learn the Nuances of Generic Business Strategies

Let’s Learn the Nuances of Business Strategy


How Do You Define Business Strategy?

Business strategy is nothing but a series of decisions that are made by the management of a company in order to obtain or maintain a competitive advantage over a period of time. It shows the overall direction of a company. It is also future focused and contains long-term sustainable goals.

A great business strategy will encompass the following characteristics:

  1. A clear direction of where the company is going and concrete plans necessary to execute the decisions
  2. An unmistakable understanding of the company’s core competencies
  3. Will solve the marketplace demands and address real customer needs
  4. Will contribute to sustainable competitive advantage
  5. Will be properly documented but gives room for future change in accordance with the environment

THE THREE BEST GENERIC BUSINESS STRATEGIES

Let’s Learn the Nuances of Generic Business Strategies

1. COST LEADERSHIP

This strategy is followed by market giants like Wal-Mart, McDonald’s, IKEA to name a few wherein, the companies focus on building a large market share by slashing the prices – mush lower than their competitors. Typically, such customers will be less loyal and more price-sensitive.

The real challenge is to succeed at offering the lowest price, but still maintain profitability and a high return on investment. The company has to necessarily run a tight ship by controlling its operational costs to improve efficiency.

Cost leadership Advantages

2. PRODUCT DIFFERENTIATION

This strategy requires the company to develop products that are “better than” or “more unique than” its competitors. The main focus is to differentiate itself from its rivals. The differentiation could be in the form of higher-end quality materials, excellent customer service, unique company image or branding, or other customer oriented values.

Typically, companies going for this strategy can charge premium pricing since their customers tend to be more loyal and less price-sensitive.

Product Differentiation Advantages

3. MARKET SEGMENTATION

This strategy simply focuses on a niche or sub-market to sell your products or services to. This is best suited when you are competing in an overly saturated market. For example the gift basket industry is highly competitive and over saturated.

If you choose to enter the field, you might have to choose a product differentiation strategy combined with appropriate market segmentation strategy. Hence you might focus on selling high end products to the wedding market.

A Wonderful Infographic from Americanexpress.com that clearly explains what needs to be done to experience an explosive business growth…

WHAT TO DO WHEN BUSINESS IS SLOW

  • Write a business plan

If you have never written one now is the time to grab a chair and fabricate a really crafty business plan with your mission, vision, values and marketing strategy included.

  • Rebrand

Work on your logo, test new colors, change your site layout, breathe some fresh life into your branding strategy.

SEND A THANK YOU NOTE TO YOUR CLIENTS

FIND NEW VENDORS

  • Read a book

Discover guerilla marketing tactics and best keep business secrets by reading

  • Cold Pitch

Create a list of prospects using leading networks like LinkedIn and reach out via email

  • Create a lead magnet

A lead magnet is an opt-in gift that you offer visitors, whether online or offline to encourage them to be part of your tribe and purchase your product or services.

Let’s understand what makes a company innovative?

48% – coming up with new ideas for products and services

33% –  listening to customers

33% – continuing to improve current product

33% – offering a unique product

28% – excellent customer service

Hope you found this information on different business strategies helpful…

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