Each company adopts a different type of business strategy based on the challenges it faces and its current situation. From this perspective, well-known companies use different business strategies than new emerging ones.
Four types of strategies
Here are the four types of strategies in business:
- Growth: this strategy is based on the constant infusion of new set of products or features in order to keep up with the growing market needs and the powerful competitors. Some companies have to opt for this strategy to meet the customer demands or they risk getting out of the game. For example, technology companies keep on introducing new features with every product they launch into the market.
Another aspect of this strategy is trying to find new markets to sell the products and services. This will help the companies widen their horizons and targeted customer’s database so they increase their sales and profits.
- Product differentiation: some companies adopt this strategy in order to be distinguished from other competitor products of the same line or industry. They might distinguish their product by its higher quality, design, ease-of-use feature, customized aspect, etc… the product differentiation strategy also improves the customer’s loyalty to the brand. This is a strategy allowing you to introduce your product’s advantages and reap the benefits out of it.
- High pricing: some companies use this price-skimming strategy especially when launching a new product, technology or service. This is considered a highly efficient way to recover the high costs of production in a very quick timeframe. Of course, the launched product has to offer exceptional features that justify the high price customers have to pay. However, this strategy has its negative side. In fact, it will encourage competitors who have the necessary knowledge in the industry to invest and create another similar product with lower prices (for example, when the first cell-phone company introduced the touch feature, all the remaining companies got encouraged to do the same and sometimes with even better results).
- Acquisition: companies who have extra capital tend to adopt this strategy in order to have an additional advantage over their competitors. This process includes buying another business or even another product from other companies. This is an easier way than introducing a completely new feature or product after creating it from scratch and helps companies get advantage from other companies’ strength points.