A strategy is a plan followed by a course of action to achieve an objective. A business strategy is a set of competitive moves and actions to achieve organizational goals. It is an outline of how a business should move to reach the set goals through business processes like production, operation, marketing, and sales.

A business strategy involves

• designing a model,
• executing the model,
• monitoring the model, and
• optimizing the model

A single standard strategy will not fit for all businesses. There is no ‘one-size-fits-all’. There are different types of business strategies for various businesses at various stages of the business. The companies working in the same industry selling similar products or services can have different business strategy frameworks and business models.

For instance, Alphabet Inc., (Google Inc.) controls the software and leaves the hardware to the experts. It has an open-market strategy for Android. Android’s code is open-source facilitating multiple developers and programmers to create applications and upgrade codes. Manufacturers use an open-source license to avail the rights to make Android phones and tablets. As a result, Android has a larger customer base across the globe. This business strategy facilitates more input of more money and intelligence while building the operating system.

On the contrary, Apple Inc. is an innovative product company. It controls the product and they are the experts too. Apple’s marketing strategy differentiates itself from other smartphones in the market. As a result, Apple has a unique customer base across the globe. This business strategy facilitates Apple to have control over the end-to-end experience, solve consumer challenges, innovate, and create new solutions.

In brief, a business strategy reflects an organization’s strengths, resources, vulnerabilities, opportunities, market value, and competitors. Let’s catch up with the most common business strategies here.

The most popular business strategies

These strategies can be used wisely and selectively as per your business to gain competitive advantage and position yourself in the market.

Cost differentiation as a business strategy

This strategy enables you to price your product in such a way that the customers tend to purchase your products in the market as compared to the competitors. A low-price strategy might misguide customers regarding product quality. Also, it may not cover up your production and other costs.

It should be a win-win situation for both the customers and your business as well. A business can decrease their production cost by buying on a large scale. They can have fewer middlemen too. This helps the business to maintain the quality and lower the price at the same time.

For instance: Walmart has a strong and loyal customer base across the US. Every customer walking into Walmart’s stores are confident that they can count on the pricing of the goods. To have a low-pricing strategy, Walmart lowered its overhead costs, minimized operation costs, introduced cross-docking in its supply chains, leveraged RFID and barcode technology, and leveraged bargaining power with manufacturers.

To succeed in this strategy, you should have a large sales volume and capital. This strategy increases business stability, brings profit, and market domination.

Product differentiation as a business strategy

This strategy is something opposite to the previously discussed cost differentiation strategy. This is all about delivering a product or service that is unique in the market in all aspects. To differentiate, you should have a hold on the market through extensive research and analysis, find the prevailing gap in the market, look or customer pains or expectations, think out of the box for innovative solutions, and improve an existing product or come up with something new.

You can opt for this strategy when your product has many competitors in the market. When you have Unique Selling Points (USPs) for your product and service, then it is easier to catch the market in lesser time. This strategy may be costly or have niche buyers alone but you will gain brand loyalty.

For instance: Rolls-Royce is one of the powerful, beautiful, and famous car brands in the world. Though this is an incredibly costly car, the brand maintains its reputation since 1906, owing to its brand consistency – British lineage, ultra-luxurious; uniqueness – traditional marketing strategy like event marketing was meeting the designers and test-drive is allowed and provides emotional rewards. They give attention to details with excellence.

To succeed in this strategy, you should provide a distinct quality and provide a product that is in high demand so that people pay a higher price. You may have limited demand and competition, but you can price high and gain brand loyalty.

Growth strategy

So now you have a name for your business in the market. It’s time to grow the business by implementing growth strategies. It is a strategy used to expand your business. It includes aspects like adding market penetration, market expansion, product expansion, franchising opportunities to diversify, invest in acquisition, and selling products online across multiple platforms. These all depend on how strong your product is, financial situation, competition, and government regulations.

For instance: WhatsApp entered a crowded marketplace and has now millions of active users. The value proposition demonstrated the product’s competitive advantage. It is a brilliantly simple cross-platform messaging app used to send and receive instant messages. WhatsApp’s growth has outpaced the likes of Facebook, Skype, and Gmail.

The takeaway note

While picking any of these or other strategies, understand whether your business has a broad or narrow market and whether your competitor follows low cost or differentiation strategy. When putting together you understand your market, competitor, and audience.
This will enable you to see where you fit and what you should follow to move the business.

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