Business Strategies
How does a business create or maintain competitive advantage and sustainability?
▪ Step 1: Identify the issue / factor that may impact performance.
▪ Step 2: Analyse the level of impact.
▪ Step 3: Implement a strategy / contingency plan.
Strategies
▪ A strategy is a plan of action to bring a change to current operations to improve the
business’ performance.
▪ Applicable to micro and market environment.
Types of strategies:
Generic strategies
▪ Affect parts of the business.
▪ Low cost: Cut operating costs and improving profitability).
▪ Differentiation: Innovation and creativity to improve product / service.
▪ Focus / Niche: Focus on specific market / product.
Corporate strategies
▪ Affect the whole business.
▪ Growth
o Market development: Existing product to new market.
o Product development: New product to existing market.
o Market penetration: Existing product to existing market.
o Diversification: New product to new market.
▪ Decline / Defensive
o Retrenchment / Harvesting: Extract assets / money over time.
o Divesture: Selling assets / divisions that are unprofitable.
o Liquidation: Selling and dissolving the whole business.
▪ Combination
o Joint venture: Working together but keep own identities.
o Merge: Joining together as new company with new identity.
o Take-over: On company absorbing another.
Integration strategies
▪ Forward integration: Control over distribution of the product.
▪ Backwards integration: Control over the supply of the product.
▪ Horizontal integration: Control over marketing by creating a monopoly.
Business Studies Business Strategies | 1
How does a business create or maintain competitive advantage and sustainability?
▪ Step 1: Identify the issue / factor that may impact performance.
▪ Step 2: Analyse the level of impact.
▪ Step 3: Implement a strategy / contingency plan.
Strategies
▪ A strategy is a plan of action to bring a change to current operations to improve the
business’ performance.
▪ Applicable to micro and market environment.
Types of strategies:
Generic strategies
▪ Affect parts of the business.
▪ Low cost: Cut operating costs and improving profitability).
▪ Differentiation: Innovation and creativity to improve product / service.
▪ Focus / Niche: Focus on specific market / product.
Corporate strategies
▪ Affect the whole business.
▪ Growth
o Market development: Existing product to new market.
o Product development: New product to existing market.
o Market penetration: Existing product to existing market.
o Diversification: New product to new market.
▪ Decline / Defensive
o Retrenchment / Harvesting: Extract assets / money over time.
o Divesture: Selling assets / divisions that are unprofitable.
o Liquidation: Selling and dissolving the whole business.
▪ Combination
o Joint venture: Working together but keep own identities.
o Merge: Joining together as new company with new identity.
o Take-over: On company absorbing another.
Integration strategies
▪ Forward integration: Control over distribution of the product.
▪ Backwards integration: Control over the supply of the product.
▪ Horizontal integration: Control over marketing by creating a monopoly.
Business Studies Business Strategies | 1
