Unpacking the Different Types of Business Strategy for Sustainable Growth
Business strategy refers to a plan of action pursued by a business to achieve its objectives. It encompasses the company’s long-term vision and the steps it takes to bring the vision to life. For a business to grow sustainably, it needs to adopt strategies that are flexible enough to adapt to the changing business environment.
In this blog, we will unpack the different types of business strategy that companies can adopt to achieve sustainable growth.
1. Market Penetration Strategy
This strategy entails increasing a company’s market share by selling more of its existing products or services within the current market. A company can use various tactics to increase its market share, such as lowering prices, improving the quality of its products or services, or increasing its marketing efforts.
For example, McDonald’s increased its market penetration by introducing all-day breakfast and a “McPick 2 for $2” deal, which brought in more customers, increased revenue, and market share.
2. Product Development Strategy
This strategy focuses on introducing new products or services to an existing market or developing new products or services for a new market. Product development allows businesses to expand their product line and attract new customers.
For instance, Apple introduced the iPhone, and later the iPad, which brought revolutionary changes to the technology industry and allowed Apple to gain a significant market share.
3. Diversification Strategy
Diversification is a growth strategy that involves expanding a company’s product line or entering new markets to reduce business risk. Businesses can diversify in several ways such as horizontal, vertical, concentric, or conglomerate diversification.
An example of diversification is PepsiCo’s acquisition of Quaker Oats and Tropicana to diversify its product line and compete with Coca-Cola.
4. Innovation Strategy
Innovation strategy involves developing new products, improving existing products, or using new technologies to meet the needs of customers better. Innovation helps businesses stay ahead of the competition and attract new customers.
An example of innovation is Tesla’s development of electric cars and advanced autonomous driving technology, which revolutionized the automotive industry.
Conclusion
In summary, businesses can adopt different types of strategies to achieve sustainable growth, depending on their goals, resource availability, and the market environment. These strategies include market penetration, product development, diversification, and innovation. Companies need to evaluate and choose the most suitable strategy based on their capabilities, market conditions, and long-term vision. By adopting an effective business strategy, companies can achieve sustainable growth and stay ahead of the competition in today’s fast-paced business environment.
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