3 Types of Strategies for Business Owners
You’re looking to make your business as robust as possible, and positioning it at the top of your industry means you need to spend time researching your business strategy.
There are many types of business strategies that will help determine where your business is going and what it might look like in the future.
Understanding what type of business strategy is right for your company means giving it the guidelines and structure to better build your business and the growth plan forward so you can meet your goals.
Not sure how to decide on the right business strategy to meet your needs? It should answer at least a few of these questions.
- Why are you in business?
- What are your strengths?
- What products or services should be your focus?
- Why have you decided on this direction forward for your business?
3 Key Types of Business Strategies to Consider
Once you understand who you are as a company and what you want, you can begin to decide on the strategic priorities that best fit your company’s needs. Here are three of the business strategies you may want to consider.
Cost Leadership Strategy
This strategy can help you increase efficiency within your company and reduce your production cost to help ensure that your costs are well below the industry average.
This is a pricing strategy, but it’s likely to attract customers’ attention because they’re continually aware of the available choices. They’re looking for the best possible value proposition.
There are a few different ways to apply this to your company. It’s possible that you can lower production costs by varying your vendor selection.
You may also lower your costs by cutting funding in other areas, such as merging jobs or buying on a large scale.
Keep in mind that this will only work for your company if you can lower your costs enough to make a fairly large profit.
You will also want to note that this strategy may require additional capital and could cause a need to cut corners that will potentially harm your business.
Differentiation Strategy
This strategy means that you provide a product that is incredibly unique when you compare it to the options available at other companies.
The goal here is to make what you have to offer truly stand out from the crowd or solve a problem that no one else is currently solving, but it requires some real innovation. Market research is a must with this business strategy.
The product itself doesn’t have to be different; it could very well be your sales strategy. Take the Dollar Shave Club, for instance.
They deliver a membership for grooming supplies, similar to those found in grocery and convenience stores, directly to your door. However, they’ve taken a modern innovative approach, highlighting their members and capturing customers who would have normally purchased these products in-store.
This business strategy tends to work best for companies in very competitive industries. Remember – costs can be quite high with this strategy, and creating too much difference may make customers shy away or exclude them completely.
Integrated Cost/Differentiation Strategy
This type of strategy combines the two previous strategies. Here, you have differentiated your products, and they’re available at a lower cost. As competition in nearly every industry increases, so too does the need for this strategy.
This is a great idea for businesses with a niche that creates a slight difference for customers within your industry.
If you want your company to stand out, this is the right way forward. It will, however, involve some compromise, and there are risks because you’ll be focused both on reducing your costs and adding value for customers.
Ultimately, If you’re not sure which business strategy might be right for your company, it’s best to speak with a business coach to help you navigate your next steps.
The right coach can help you understand your options when it comes to business strategies and how to implement them for your company. Our experienced business coaches are here to help; contact us today.
