In this article, we will discuss and elaborate on the different types of strategies in marketing (strategic management). We also want to give some concepts about the levels of strategy making. For a better understanding, types of strategic management and other related issues are described as below.
Before going to the main topic, we must first understand as to what the term strategy implies. The term strategy has been borrowed from military. Today the competition, a business faces, is similar to a war and every business wants to be one step up over its nearest rivals. Strategy is a common theme of strategic decisions through which an organization tries to develop certain advantages which help in achieving its vision and mission.
For better clarification of the term strategy, we should distinguish among three forms of strategy: general strategy, corporate strategy, and competitive strategy. The general strategy is such a strategy as to how a given objective will be accomplished. Thus, the general strategy is concerned with the relationships between ends and means, in other words the things we seek will be accomplished by the resources at our disposal. Strategy and tactics we use, both together make a bridge the gap between ends and means. Corporate Strategy defines the markets and businesses in which a company is going to build its basis and try to compete its rivals. The success of a competitive strategy depends on the company’s capabilities, strengths, potentialities and also its weaknesses versus its competitors’ capabilities strengths, and weakness.
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Types or levels of Strategic Management:
If we want to mention the levels of strategic management, we can specify it as five levels.
Firstly, competitive strategy is the first level strategy in strategic management. The competitive strategy aims at gaining a competitive advantage and superiority in the marketplace against all the competitors in the same field. Competitive advantage comes from strategies that lead to some uniqueness in the market and will distinct it from other rivals. Winning a competitive strategy is grounded in competitive advantage and capabilities. Examples of the competitive strategy include contrast strategy, low-cost strategy, and focus or market-niche strategy. In each business, a competitive advantage is an approach that leads an organization to outperform its competitors in a large extent.
The competitive strategy consists of business approaches and initiatives services. It helps a company to attract clients by delivering high quality services. Valuing customers’ needs as well as strengthening our market position. This definition of Thompson and Strickland about competitive strategy emphasizes the ‘tactics and ingenuities’ of managers in outlining the strategies. It means that competitive strategy is concerned with actions. The managers undertake to improve the company’s position in the market by satisfying the customers. This goal will be achieved by undertaking actions contrary to competitors in the industry.
Therefore, the notion of competitive strategy has a competitor-angle which includes those tactics and plans to build a livable, competitive advantage. The aim of the competitive strategy is to win the customer’s heart by satisfying their needs. Finally, this leads to outcompete competitors and attain competitive advantages.
Secondly, corporate strategy is the next level of strategy in strategic management. It draws up at the top level by the senior management of a group of companies which would describes the company’s overall corporate strategy. corporate strategy defines the long-term objectives of whole organization and generally affects all the organization subset.
Thirdly, the different types of strategies in strategic management are business strategies. Business strategy formulates at the business-unit level and is known as ‘business-unit strategy.’ This strategy mostly focuses on creating the company’s competitive position of products or services. Business strategies compos of a competitive and cooperative approach.
In other words, the business strategy covers all the activities and tactics for competing in denial of the competitors. And behavior management addresses various strategic matters. As Hill and Jones have remarked, the business strategy consists of ‘’plans of action’’. The business strategy consists of plans of action adopted to use the company’s resources and competencies to gain competitive advantages in the market. Furthermore, managers change distinctive attitudes to gain a competitive advantage over their rivals in the market. The business strategy usually formulates in line with the corporate strategy. The business strategy’s main focus is product development, innovation, integration, market development, diversification, and the like. The contents that we are trying to present to our students in our online MBA training courses.
In doing each business, companies confront a lot of strategic issues. Management has to address all these issues effectively to survive in the marketplace. Business strategy must deal with these issues, in addition to ‘how to compete.’
Fourthly, the functional strategy is another level of strategy in strategic management. A functional strategy refers to an approach that points up a particular functional area of an organization. It sets down to achieve some objectives of a business unit by maximizing all probable resource productivity. functional strategy also is known as departmental strategy since each business function frequently devolves with a section. Examples of functional strategy comprise production strategy, marketing strategy, human resource strategy, and financial strategy.
At the level of operating divisions and departments, functional strategies focus on business processes and value chains. Each business unit has its own set of departments, and every department has a functional strategy. All the sections and departments should function supportively like a chain, for achieving an ultimate goal to support a competitive strategy.
For example, a company following a low-cost competitive strategy needs a production strategy. It insists on reduction cost operation and also a human resource strategy. Furthermore, it insists on retaining the lowest possible number of employees. These employees should be highly qualified to work for the organization. Other functional strategies such as marketing strategy, advertising strategy, and financial strategy must also be formulated to support the low-cost competitive strategy. The organizational plans will become more and more detailed.
Finally, the operating strategy is the fifth level of strategy in strategic management. It gives form to the operating units of an organization. A company may develop a long-term operating strategy for the future of its organization. As an instance, for its sales zones. An operating strategy is put across at the field level, usually to achieve on-hand objectives. In some companies, managers develop an operating strategy for each set of annual goals in the divisions.
Operational Strategy try to answers the questions:
