There are at least three basic kinds of business strategies.
According to the reference, "Three Kinds of Business Strategy," there are multiple levels of strategy that businesses consider:
Types of Business Strategies
Here's a breakdown of the three fundamental types:
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Just Plain Strategy (or Strategy in General): This is the broad approach a company takes to achieve its objectives. It involves defining the long-term goals, understanding the market, and allocating resources effectively. Think of it as the overarching plan that guides all business activities.
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Corporate Strategy: This type of strategy focuses on the overall scope and direction of a multi-business company. It tackles questions like:
- What businesses should we be in?
- How should we allocate resources among our various businesses?
- How should we structure the corporation to manage our portfolio of businesses?
- An example might be a company deciding whether to diversify into new industries or focus on its core businesses.
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Competitive Strategy: This strategy focuses on how a single business will compete in its specific industry or market. Key questions addressed include:
- How can we gain a competitive advantage?
- How do we position our products or services in the market?
- How do we differentiate ourselves from our rivals?
- Examples of competitive strategies include cost leadership, differentiation, and niche marketing.
Here's a table summarizing the types:
| Strategy Type | Focus | Key Questions |
|---|---|---|
| Just Plain Strategy | Overall approach to achieve objectives | What are our long-term goals? How will we allocate resources? |
| Corporate Strategy | Multi-business company scope and direction | What businesses should we be in? How should resources be allocated? How should we structure the corporation? |
| Competitive Strategy | How a single business competes in its industry | How can we gain a competitive advantage? How do we position our products/services? How do we differentiate ourselves? |
Therefore, while there are other aspects to strategy, there are three fundamental types of business strategies.
