Question

(about 1000 words)
Illustrate the different types of strategies

Answer 1

Strategy

Strategy is an action plan that managers take to achieve all the company goals. These are the general directions used by each managers. It indicates a blueprint of all the activities an organization is going to undertake.

Types of Strategies

Following are the different types of strategies:

1. Corporate Strategy

2. Business Strategy

3. Functional Strategy

4. Operating Strategy

Corporate Strategy

Corporate Strategy is otherwise known as Grand Strategy. It includes growth, stability, retrenchment and Combination strategy.

The growth strategy means it helps in the development or growth of a business and it includes the following ones;

a) Concentration: It is the expantion of business by bringing together all the resources into one to keep the customer needs singly or jointly.

b) Integration: It is another type of expantion by combining the activities of a firm.It includes horizontal ( firms are operating in the same level) Vertical ( Firms are operating in different levels)

c) Diversification: It is the process of expanding by adding new products, customers or new technologies to the existing ones. It include Concentric ( Adding related products to existing ones) Conglomerate ( Adding new features. but they are not related to each other)

Stability Strategy is known as 'No-change strategy', which means maintaining the present strategy of a firm. There is no change in the existing strategies.

Retrenchment Strategy is that strategy which reduces the business activities.It may be due to the loss incurred by the firm or any other reasons. It includes liquidation strategy, Sell off strategies, etc...

Combination Strategy is the combination all the above strategies.

Business Level strategy

This strategy is based on the competition in the market and it focuses on cost leadership or differentiation.

Functional Level Strategy

This strategy is made up for different departments and includes finance strategy, HR strategy, Marketing strategy, etc..

Operating Strategy

Operating strategy focuses on the bottom level of a firm and day-to-day activities such as production, sales, etc...