Strategy is a pre-thought out comprehensive plan that is necessary to achieve the goals of the enterprise and fulfill the mission. Most often, the strategy is developed by the top management of the enterprise, which is assisted by managers at different levels of management. Types of strategies are very diverse. Each of them pursues certain goals, therefore it is used only when it is really necessary. Consider the main types of strategies that are most often used by enterprises to achieve their goals.
Types of enterprise development strategies
Market / Product Opportunity Strategies
· Product development - effective when the company is very popular with consumers. Here you can try the following: use standard (traditional) means of marketing, emphasize in advertising that new products are better than old ones, put more emphasis on new models that are closely related to already introduced products.
· Deep penetration into the market - the most effective when the company operates in a familiar, not oversaturated product market. The main thing here is to reduce production costs. Here you can use: intensive advertising, discounts, benefits, establish control over the work of competitors, sell goods at a lower price than competitors.
· Market development - effective in expanding the market, with the emergence of new areas of application of popular and well-known products. The enterprise’s actions may include the following: penetration into regional markets, desire to increase sales of existing goods in the markets, enter new market segments where practical demand is not satisfied, use more energetic efforts to promote the product.
Integration strategies
· Progressive - implies the growth of the enterprise through the acquisition and use of crops that are between the producer and the end user.
· Regressive - involves the growth of the enterprise, which will be achieved through the acquisition of new raw materials and the creation of subsidiaries that supply.
· Horizontal - the company’s actions are aimed at absorbing competitors or establishing more stringent monitoring of their activities in the market.
Diversification strategies
· Horizontal - the search for ways to grow in the existing market by promoting new products that are different from the ones used. Moreover, the new product should be intended for former customers.
· Conglomerate - the expansion of the enterprise through the production of products that are not technically related to the previous products.
· Concentric - the search for or use of additional tools and capabilities already existing in the business for the release of new products, goods and services that are similar to existing products, goods and services of an enterprise.
Continuing to consider the types of strategies, we pay attention to the following:
Product Strategies
· Low costs - directs the company's management to mass production of goods, due to which it is possible to reduce prices and minimize costs.
· Concentrations - directs management to work with unique or highly specialized goods, services, products.
· Differentiation - is the release by the company of an attractive product that will interest consumers. At the same time, the product is produced in several modifications, i.e. differs in design, quality, packaging.
Small Business Strategies
· Optimal size - used in those areas of business that bring small profits for large enterprises.
· Copying - directs small enterprises to produce products that will be an inexpensive analogue of high-quality and expensive products from well-known manufacturers.
· Using the merits and advantages of a large producer - franchising can be an example - the contractual relationship between a small and a large producer, in which a small producer has the right to use the trademark of a large producer for some time, to use its technologies and equipment.
· Participation in a product of a large manufacturer - the bottom line is that large companies, engaged in the production of complex products and going through all production stages on their own, need to organize small production, which is not always efficient and cost-effective. That is why it is more profitable for a large producer to stop small-scale production and simply purchase products from the latter.
Reduction strategy
· “Harvesting” - refusal from long-term participation in business in order to receive large incomes in the short term.
· Liquidation - a “union” of enterprises when one of them is liquidated in order to reduce costs in working together.
· Partial cost reduction - a temporary short-term measure, the purpose of which is to reduce production costs, reduce staff and hiring, reduce the production of goods in the event of a probable threat of crisis.
· Partial reduction of units - sale or closure by an enterprise of unprofitable, unpromising units. The main goal is to obtain funds for the development of a more promising business, the introduction of innovations, etc.
Thus, the types of strategies are a powerful tool for the development of any, even the most disastrous enterprise. It is thanks to their diversity that you can choose the most suitable strategy to exit this or that situation. The types of strategies allow the company to bring its new products to the market, successfully organize the sale of old products, introduce new technologies into production, in a word, get profit where it was previously impossible to extract.