Business Level Strategy: Examples and Types of Business Strategies in Management

Globally, there is a high level of competition in the competitive industry. As a result of this, each company designs a strategy it believes it can exploit. Business strategy is a detailed action embarked upon that provides customers with value and achieve a competitive advantage by exploiting core competencies in a specific market.

 

 

Business Level Strategy

 

Business level strategy portrays the company’s position in the industry as having a competitive advantage over its competitors. However, customers form the core importance of every company’s existence. As a result of this, organizational activities are geared toward how customers’ needs are met at a cheaper price. In a nutshell, it explains how the company differentiates itself from competitors, its earning capacity, and where it earns a margin.

The business level strategy emphasizes how customers’ satisfaction is achieved by offering goods and services at a cheaper price and increasing the company’s operating profit. In the course of achieving this, the business strategy focuses on positioning the company against competitors by leveraging on the latest market trend, innovations and technological breakthroughs.

Business level strategies outline a company’s core competencies. These competencies represent a company’s strength which is created to obtain market share in the business environment. For instance, offering good customer service, unique products that the competitors find very difficult to duplicate.

With the integration of these core competencies into business strategies, a sustainable competitive advantage is employed by the company over its competitors in the industry. There are two distinct ways of gaining a competitive advantage. According to Michael Porter, they are referred to as “Generic strategies”.

Besides, having an overview of the project you are about to undertake is an essential part of project management. This is what project scope management focuses on.

Low-Cost strategy: this has to do with giving customers value for money and concentrating managerial strength and attention on lowering the cost of the organization.

Wal-mart, Dell Inc, and Southwest Airline are typical examples of firms that embraced a low-cost strategy. Their attention is centered on how goods and services will be offered to the customers at a reasonable price. The successful pursuit of this strategy makes them more flexible than their rivals and more profitable. It leads to greater market gains, thereby enabling a company to achieve economies of scale.

Differentiation strategy. This strategy centers its focus on how the value of a product offered to the customer is increased. A product can be differentiated on the following:

• Superior reliability
• Better design
• Superior functions and features
• Better after-sales services and support
• Better branding.

By and large, when a differentiated product is valued by customers over the one sold by competitors, it implies that differentiated strategy has given the company a competitive advantage that enables it to capture more consumers’ demands. For example, Sinnaps, project management software has successfully differentiated its service from that of its competitors by offering software that is efficient and very easy to use.

However, when the product is differentiated, the managers are left with the option of how to translate the competitive advantage that results from successful differentiation into sustained high profitability and growth.

Practically, differentiation most times raises the cost structure of the company and contrary to this; greater profitability and growth can also come from the increased demand attributed to successful differentiation. For example, Sinnaps will calculate the critical path to optimize workflows and resources consumption. This leads to higher efficiency in asset utility and cost reduction.

 

 

 

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Competitive Business Strategy Examples

 

Competitive business strategy is the long-term action plan that is devised to assist a company in gaining a competitive advantage over its rivals. Competitive business strategies are very vital to the companies competing in the market that is saturated with alternatives for consumers.

For example like Wal-Mart, IKEA, South West Airlines, McDonald’s and FedEx have an operational excellence strategy aiming to accomplish cost leadership with this strategy, they were able to focus on the automation of their manufacturing processes and work procedures in order to streamline their operations and reduce their operational costs.

Another example is the customer intimacy as a competitive strategy where a company will focus on offering a unique range of services that allow personalization of service and the customization of products to meet the needs of the customers. Companies such as IBM, Lexus, Virgin Atlantic, and Amazon.com have used this strategy over the years.

Strategic business objectives are statements that indicate what is vital in the organizational strategy. They are goals a business is trying to achieve over a certain period of time. The timing ranges from 3 – 5 years. The objectives include financial objectives, customer objectives, internal objectives, customer service, operational excellence, regulatory, and learning and growth objectives.

The strategic business objectives examples include financial objectives which include the strategic goals to grow shareholders’ value, grow earnings per share, increase the revenue, manage cost efficiently, and maintain appropriate financial leverage. Also, it could be the customer objectives which could include broad brand offering dependable service delivery to the customers, increase the share of the market and improve service.

 

Types of Business Strategies in Management

 

The most crucial part of a risk management plan in project management is the risk strategy. So, there are different types of business strategies that companies can embrace in order to get their business off the ground. They are the following:

Growth strategy: this includes the introduction of new products or adding a new feature to existing products.

Product differentiation strategy: this is often used by small companies in order to have a competitive advantage over others. This is done by rendering quality services to set themselves apart from the key competitors.

Price-skimming strategy: this is charging of high prices for the products especially during the introductory stage. This is carried out by companies to swiftly recover its production and advertising costs.

Acquisition strategy: a company with extra financial resources can use this strategy by purchasing another company or one or more of its product lines. An example is Facebook acquiring Instagram.

 

Company Strategy Plan Example

 

This is the roadmap to grow the business of a company. The company strategy plan must contain the following in order to succeed. They are an executive summary, elevator pitch, company mission statement, SWOT, Goals, Key Performance Indicators (KPIs) Target customers, Industry Analysis, Competitive Analysis and Advantage, Teams, operations plan, and financial projections.

 

Business Development Strategy

 

A business development strategy is the road map that states where you intend to take your business and the steps that are needed to be taken to get there. In essence, it must be measurable, you must be able to keep a track of it, and most definitely it must be flexible.

That is, you must be able to adjust it to meet new challenges as demanded and take full advantage of unpredicted opportunities.

Here are useful ideas you can use to develop your business strategy:

1. You need to carefully look into the past to plan the future of your business: this will entail the appraisal of the past to evaluate what worked and what did not work for you.
2. Determine your most productive market section: these are the most successful sections of your business with a clearly-defined target market. With this, you can decide to stop certain market sections that are unproductive and lay more emphasis on the productive sections.
3. Clearly define how you want your business’ success to be in some key areas like customer service experience, generating new business opportunities through referrals, cross-sells, and up-sells.
4. State the revenue that will be required to execute new investments in your business
5. Next line is the review of the target market. Here, it could be like we are targeting food processing companies in New York with between $2 million and $20 million in revenue.
6. Then carefully choose your marketing channels.
7. Finally develop your business development smart goals which must be specific, measurable, achievable, realistic and time-bound.

 

Business Growth Strategy

 

The core objectives of every company are to grow their businesses, increase sales, and generate profits. However, the method a company uses to expand its business is largely dependent on its financial strength, the competition, and government regulation.

 

Examples of Business Growth Strategies

 

1. Market penetration: this is used when a company decides to market existing products within the same market it has been using. The company goes about this by increasing its market share.
2. Market expansion: this is mostly called market development which entails selling current products in a new emerging market.
3. Product expansion: this is employed when a small company expands its product line or adds new features to increase its sales and profits. When it is employed, the product will continue to sell within the existing market.
4. Diversification strategy: this applies when a small company sells a new product to a new market.
5. Acquisition: this applies when a company acquired another company to expand its operations.

However, all these strategies require thorough planning before they are implemented.  Sinnaps will assist organizations in planning their business strategies.

 

Corporate Level Strategy Examples

 

A strategy is the heart of the business; it is the strategy that will place your business above your competitors. It is the driving force of the business. The levels of strategic management are;

Corporate strategy level: this will outline the overall strategies, it will define the markets it will operate in and will plan how these markets will be entered. An example of the corporate level strategy is the Apple computer’s targeting of personal music system to accelerate growth faster than with its personal computer business alone.

Another notable example is IBM’s coining of the term e-business and its subsequent use of the organizing theme for all that the company did in the late 1990’s.

Business strategy level: this will use corporate strategy to define specific tactics for each market and relate how each business unit will deliver these planned tactics.

Functional strategy level: this will define the day-to-day actions need to deliver corporate and business levels strategies. It will also define the relationships needed between business units, departments, and teams. It will define how functional goals will be met and monitored.

 

Focus Strategy Example Company

 

This is a marketing strategy in which a company concentrates its resources on entering or expanding in a narrow or industry segment. A focus strategy is usually embraced where the company knows its segment and has products to competitively satisfy its needs.

An example is Frog Box, a moving company that renders a cost-effective and environmentally friendly alternative to the use of cardboard boxes for moving. The company donates 1% of its gross revenues to frog habitat restoration.

Another typical example is Ten Tree, an apparel company that is committed to stewardship, transparency, and community involvement. The company vows to plant 10 trees for every purchase made from it.

 

Strategic Business Unit Example

 

It is a profit center which focuses on product offering and market segment. This is a fully-functional unit of a business that has its own vision and direction. It operates independently as a separate unit but reports directly to the headquarters of the organization about the status of its operations.

It is independent in terms of operations and is focused on a target marketplace. Strategic business units have a discrete marketing plan, market analysis though they are an appendage of a larger business entity. It has its own support functions such as human resources and training department.

This works efficiently for organizations that have multiple product structure. Examples of strategic business units are General Electric, LG, Proctor and Gamble. LG as a company has different product categories under the same roof. It produces consumer durables such as washing machines, refrigerator, television, and others.

These small units are formed as separate strategic business units so that revenues, cost as well as profit can be tracked independently.

 

Global Business Strategy Model

 

This is defined as an organization’s strategic guide to globalization. As a result of the global connection, revenue should not be confined by borders. A global business strategy can be employed by organizations to reap the rewards of trading in a global market.

World economies are greatly influenced by globalization and as a result, there is a reduction in tariffs, enhanced communication, and increased capital mobility. Sinnaps will aid business organizations in the globalization of their business in planning, execution, and monitoring of their activities.

 

Distribution and Operations Strategy Examples

 

These are strategies used by organizations in distributing their services to the customers. The goal of operations is to reach the objectives of the business. It is imperative for business organizations to distribute to the consumers at the right place and at the right time.

Efficient and effective distribution is important if an organization wants to meet its overall marketing objectives.

An organic food brand like Whole Foods Market and Amy’s Kitchen will open its own chain of retail shops to sell to their customers while a sugar refining company will sell to a wholesaler. Apple can sell iPhones directly to the customers through online directing marketing strategy.

 

Business Strategy Analysis

 

This is the process of conducting research on a company and its operating environment in order to design a strategy. The factors involved in the analysis are the following;

• Identifying and evaluating data relevant to the company’s strategy
• Defining the internal and external environment to be analyzed.
• Using several analytic methods such as Porter’s five forces analysis, SWOT analysis, and value chain analysis. Porter’s five forces is a powerful tool for understanding the competitiveness of your business environment and for identifying your strategy’s potential profitability.

Porter identified 5 forces that make up the competitive environment which can erode your profitability. They are the competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entry.

A SWOT analysis is a study undertaken by an organization to identify its internal strengths and weaknesses as well as its external opportunities and threats related to its business competition.

Value chain analysis is the set of activities that a firm operating in a specific sector performs in order to deliver a valuable service for the market.

Business level strategies should be painstakingly planned and executed in order to achieve the purpose of beating off competition; it entails the use of the right tool for planning, implementing, monitoring, and documentation. Sinnaps is an efficient tool that can be used by companies to do their detailed strategic planning thereby aiding their strategic management decisions because it optimizes and evaluates projects in real-time because of the Earned Value panel feature in it.

It is easy to use and can easily visualize the strategies, it supports teamwork and allows strategic plans to shared among all and sundry involved in the running of the company. It is cloud-based thereby making it ideal for the documentation of business strategies and it will effectively store the information.

Again, it can be used in the simulation of business strategic plans, without a doubt, companies can carry out their business level strategy with a tool like Sinnaps in order to optimize their resources and obtain outstanding results in their productivity and profitability.

 

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