In the last few decades, entrepreneurship and setting up businesses are even more famous and attractive to the youth than going to colleges and acquiring degrees and then hunting for jobs. The current generation has a far-reaching vision for a better and brighter world. The youth of today is already dreaming of even more advanced technology than today and is working for it as well. Setting up businesses is not even the first step. The first step is to have a good or solid idea about which one is setting up the business with. The next step is to develop dependable and solid business strategies.
As the saying goes, one can build a solid building only if there is a good foundation. Just like that, one can set up a successful business only if one has developed and maintained solid business strategies. Developing proper business strategies may be time-consuming but they are a vital step to setting up a profitable and successful business or start-up.
The most simple and basic definition of business strategy is a clear set of plans, actions and goals that outlines how a business will compete in a particular market, or markets, with a product or number of products or services. In other words, a business strategy is an outline of the actions and decisions a company plans to take to reach its goals and objectives.
There are different types of business strategies which are developed, revised and used for different types of businesses and start-ups. These strategies create a proper plan for one’s business to reach the goal they aspire to. The business strategies can be compared to the blueprint of a house which is yet to be built.
Types of Business Strategies
As cited above, there are several types of business strategies which can be reworked for different purposes in different companies. They perform a critical role in the development and evolution of the company. The primary types of business strategies include:
- Cost Leadership: ensuring you cost less than your competitors.
- Differentiation: ensuring you are different from your competitors.
- Broad market: serving a diverse market.
- Narrow market: focusing on a niche market.
Purpose of Business Strategies
As mentioned above, business strategies play a critical role in the development of a company. However, what do they actually provide to the company that is considered this important? Some of the results we acquire by executing business strategies a successful are:
- Achieving effectiveness,
- Perceiving and utilising opportunities,
- Mobilising resources,
- Securing an advantageous position,
- Meeting challenges and threats,
- Directing efforts and behaviour
- Acquiring command over a particular situation.
Decks of Business Strategies
There are several types of businesses in different sectors and of different sizes. So, different steps and types of business strategies are used nowadays. Some of them include:
- Corporate level strategy: Corporate level strategy is a long-range, action-oriented, integrated and comprehensive plan formulated by the top management. It is used to ascertain business lines, expansion and growth, takeovers and mergers, diversification and so on.
- Business level strategy: The strategies that relate to a particular business are known as business-level strategies. It is developed by the general managers, who convert mission and vision into concrete strategies. It is like a blueprint of the entire business.
- Functional level strategy: Developed by the first-line managers or supervisors, functional level strategy involves decision making at the operational level concerning particular functional areas like marketing, production, human resource, research and development, finance and so on.
Advantages of Business Strategies
Some of the advantages of planning and implementing business strategies include:
- The strategy provides a vision of the future
- confirms the purpose
- values of an organisation set objectives
- clarifies threats and opportunities
- determines methods to leverage strengths
- mitigate weaknesses
Disadvantages of Business Strategies
Some of the disadvantages of business strategies include: