Strategies

What is a business strategy?
A business strategy, sometimes termed a competitive strategy or simply strategy, is here defined by six elements or dimensions. The first four apply to any business,even if it exists by itself. The remaining two are introduced when the business exists in an organization with other business units. A business strategy specification includes a determination of:
1. Theproduct market in which the business is to compete. The scope of a business is defined by the products it offers and chooses not to offer, by the markets it seeks to serve and not serve, by thecompetitors with whom it chooses to compete and to avoid, and by its level of vertical integration.
2. Level of investment. Although there are obvious variations and refinements, it is useful toconceptualize the alternatives in terms of:
• Investing to grow(or enter the product market)
• Invest only to maintain the existing position
• Milk the business by minimizing investment
• Recover as muchof the assets as possible by liquidating or divesting the business.
3. The functional area strategies needed to compete in the selected product market. The specific way to compete will usually bycharacterized by one or more functional area strategies such as a:
• Product line strategy
• Positioning strategy
• Pricing strategy
• Distribution strategy
• Manufacturing strategy
• Logisticalstrategy
4. The strategic assets or skills which underly the strategy providing the sustainable competitive advantage (SCA). A strategic skill or, simply, skill, is something a business unit doesexceptionally well, such as manufacturing or promotion, which has strategic importance to that business. A strategic asset or, simply, asset, is a resource, such as a brand name or installed customer basethat is strong relative to competitors. Strategy formulation must consider the cost and feasibility of generating or maintaining assets or skills that will provide the basis for a sustainable...