Business Strategy: An Introduction
Many people often get confused when talking about business strategy as they don’t really know how to define it. Well to keep it in simple terms, it is a clear set of plans, actions, goals that outlines how a business will achieve its objectives and how it will compete in the market against various products and services. Business strategy simply outlines the do’s and don’t to execute the plan correctly and achieve goals. Every company formulates its business strategy in its own unique ways. For example, Intel which is one of the biggest semiconductor companies in the world has adopted a unique set of strategies. Intel Business Strategy focuses more towards generic development of products and intensive growth which outlines how to increase the demand for the particular product or service drastically.
Intel’s Business Strategy:
As mentioned above, Intel has two strategies for their business. Their business grows through an appropriate generic strategy and effective intensive growth strategies. The generic strategy suggests an action plan on how to differentiate the company's product from the competitors by using cutting-edge technology. This generic strategy builds competitive advantage based on product quality or features, customer service, and brand image management. The intensive growth strategy highlights how to grow the market share of a company by using various means such as product development, market penetration, market development and diversification.
Standard types of Business Strategies:
The types of business strategies mentioned above are some of the most widely used strategies. There are also several other standard business strategies types which are used widely globally. Following are such standard business strategies:
Product Differentiation Strategy:
This strategy suggests that you can sell your product at your desired price if it provides some sort of unique or additional feature to the customer. Today, customers search for such products and companies which provide something unique. Product differentiation strategy is used widely to create competitive advantage, price leverage and to shift the consumer preferences. This kind of strategy allows you to sell the product on the terms and conditions you want because your product delivers superior value.
Cost Differentiation Strategy:
This concept of strategy is completely based on how to pricing your product right. The price of the product should neither be too low or too high as in both the cases it will hurt your business. If it is the former case then sales will not increase, while if latter is the case then consumers might think of your product as of poor quality.
Growth Strategy:
The growth strategy suggests that a company should expand its business when the revenues are constant and sufficient enough for expansion of business. Business growth can be achieved through product expansion, introducing new products, increasing the demand for the existing products or increasing the market size. This strategy is very simple to Intel's business strategy of intensive growth.
The Takeaway:
Every business is different in size and nature, thus the business strategies too should be different. Business strategy is that tool with which you can have an advantage over your competitors. So choosing the correct business strategy is an important decision, for which all the necessary research, analysis and comparisons should be done, before implementing the strategy.
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