The four types of corporate strategy
A lot of people may find they get confused about the difference between a corporate strategy and a business strategy, but it is pretty simple. A business strategy focuses on how a business will compete, whereas a corporate strategy focuses on business growth and profits. Below, we have listed the four different types of corporate strategies to grow your business.
When a company focuses on a stability strategy, they are putting their attention towards the market they exist within and their current products. The best time to implement this strategy is when you are satisfied and fulfilled with your business’s current market position and overall market share. If you are unsure of when to implement this strategy, then there are two main reasons below:
- You want to strengthen your positioning within the market
- Plan for future changes
A combination strategy is just as important and occurs when a company brings other strategies together instead of solely focusing on one. These strategies are implemented to help the firm have higher profits and create stronger value for shareholders. Some reasons as to why this may be implemented are:
- A large business with fast changing environment
- Your products are in different stages of the life cycle
- This particular strategy is best for those businesses which perform unevenly.
This type of strategy is used to restructure strategies that have been implemented within the business. These schemes are put in place to remove those products or other inefficient operations that aren’t providing any profits to your business. This strategy is really only incorporated when the business needs ‘saving’ and must change or restructure the overall operations to gain more success within the market. Reasons you may want to incorporate this strategy are:
- The business is performing poorly
- There is room for improvement, which could result in more success
This strategy is based on expanding the business by either bringing new products to the market or entering a different market overall to improve share. A lot of businesses will follow this strategy as it’s a great way to redefine the business and improve performance. Reasons, why you may consider introducing this strategy into your business, are:
- If the market or environment is due to change rapidly, this may be needed for survival
- Expansion provides an increase in success
- Expansion can provide competitive advantage
- It’s highly rewarding and can add lots of benefits to the business.
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