Business strategies are the master plans that organizations develop and implement to reach their strategic objectives. A successful business strategy should answer a series of questions about how a company can compete, grow, and thrive. There are four common business strategies that companies use to achieve their goals: product differentiation, price reduction, international strategy, and global strategy.Product differentiation is a tactic employed by small businesses when they have a competitive advantage, such as superior quality or service. This approach helps build brand loyalty by providing customers with something unique and desirable.
An example of this would be a small air purifier manufacturer that differentiates itself from the competition by its advanced engineering design. Price reduction is a strategy that involves charging high prices for a product, especially during the introduction phase. This allows companies to quickly recover their production and advertising costs. However, the product must have something special for customers to pay the exorbitant price. An international strategy focuses on a single point of operation while exporting products and services around the world. This is usually the first strategy used by companies when expanding to secondary markets, as it is the most accessible of the four.
However, it ranks low in both global integration and local response capacity. The global strategy is an extension of the national strategy, which consists of operating with a central or central office in the domestic market and exporting products to target markets. The biggest challenge of this strategy is knowing what degree of standardization should be pursued. Many companies use an international strategy to get started before transitioning to one of the other three strategies. A transnational strategy divides the difference in terms of local response capacity and global integration. As a leader, you must prioritize your business strategy and make sure that you spend some time outside of everyday life defining your business roadmap.
Ultimately, a business strategy aims to answer a series of questions about how a company can compete, grow, and thrive.
