Monday 24 December 2018

Types of Strategy

Types of Strategy

Many organizations run two or more strategies simultaneously, but the combination of strategies can be very risky if performed too far. In a large and diversified company, combination strategy is usually used when the divisions that separate running different strategies.

Also, organizations that are struggling to stay alive might be using a combination of a number of defensive strategies, such as divestitures, liquidation, and rationalizing costs simultaneously.

Types of strategy are as follows:

The strategy of Integration

The integration forward, backward integration, horizontal integration is sometimes everything is known as vertical integration. Vertical integration strategy enables the company to control its distributors, suppliers and/or competitors.

Intensive strategy

Market penetration, product development and is sometimes refer to as intensive strategy
because everything requires intensive efforts if the position of the company's competition with existing products about to be increase.

Diversification Strategy

There are three types of diversification strategies, namely diversification concentric, horizontal, and conglomerate. Add a new product or service, yet still related concentric diversification is usually call. A new product or service that is not related to existing customers is call horizontal diversification. Add product or service that is not call new diversify conglomerates.

Defensive Strategy

Along with the strategy of intensive, integrative, and diversification, organizations can also run cost rationalization strategy, divestitures, or liquidation. Cost Rationalization, occurs when an organization doing a restructuring through cost savings and assets to boost sales and profit return is being decrease.

Sometimes refer to as the strategy of turning (the turnaround) or reorganization, cost rationalization design. To strengthen the basic criterion of competence of the organization. During the process of rationalizing costs, strategy planners are working with limit resources and face pressure from shareholders, employees and the media.

The divestment is to sell a division or part of the organization. It is often use to increase the capital that would be use for acquisitions or strategic investment further. Divestment can be part of a comprehensive cost rationalization strategy to extricate the organization from unprofitable businesses. Which need capital too large, or it does not match with other activities within the company.

The liquidation is to sell all the assets of a company are gradually according real value of assets. Liquidation is the admission of defeat and consequently may be a strategy that is emotionally difficult. However, perhaps better ground than continue to suffer losses in large numbers.

Common Strategy

According to Michael Porter Porter, there are three cornerstone of strategies. That can help your organization gain a competitive advantage, namely the cost advantage, differentiation, and focus. Porter name the third general strategy.

Excellence costs emphasize the manufacture standard products with a very low cost per unit for consumers. Who are sensitive to price changes. Differentiation is a strategy with the goal of making products and providing services. That are consider unique throughout industry and address to consumers who don't really care relative to changes in price. Focus means making products and providing services. That meet the needs of a number of small groups of consumers.

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