We'll assume you're ok with this, but you can opt-out if you wish. In the case of differentiation, the initial costs are way above industry average since the offering is unique which includes more patents, IPRs and there are less or no competitors and hence the pricing is premium. Different features from similar products in the market place, Different functionality from similar products in the market place. There are three broad types of business strategies that most strategic management courses in India talk about: Cost Differentiation Strategy This strategy is all about pricing your product right. Now here, the means, as well as the ends of this, would be to keep the costs low so that the final product is priced accordingly while keeping the profit margins undisturbed. In spite of being almost identical, product and services can be differentiated with the help of promotions and advertising, however, the advertising for these niche products should be unique and appealing. In other words, the price-sensitive class of customers is the target segment of the firm and all the business activities are planned accordingly, right from procurement of raw materials to distribution and marketing. This pass is priced at a lower price than regular unit ticket but this pass will not be valid for Airport Metro, which although run by the same company, charges higher than the usual fare. In Business terms, Strategy could be understood as a plan to beat competitors. A business strategy refers to the actions and choices that an organization utilizes to achieve its goals. It may or may not have products for regular customers. Products-services offered 2. For ex: Commuters in Stockholm get a pass for metro which may be either monthly or weekly. What is a business strategy; What are the three basic business strategies. Many infact, even feel that they must either avoid marketing totally, or keep it to the minimum (thereby trying to reduce costs), which needless to state affects their sales. Ex: Chrysler vehicles has cars for regular people as well as for handicapped audience tailor-made according to their needs. Best Tips to Master Charisma Skills, Etiquette: Meaning, Types, Benefits and Basic Rules. The Types of Business strategies being used will depend on goals – short and long, target market, industry and competition of the firm. Focus Type of Business Strategy is divided into two parts viz Focused Cost Strategy and Focused Differentiation strategy. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. They pass along a lot of the benefits of this economy to their customers in the form of lower prices. What success has your organization had in developing its strategy? You also have the option to opt-out of these cookies. Add a prefix and it will define the respective term. Business Strategy is a business plan devised to beat competitors. Final words, the choice of strategies as well as their implementation is crucial for business firms since the choice of strategy will help the firm in achieving sustainable competitive edge and it would also assist in long and short-term business decisions. But opting out of some of these cookies may affect your browsing experience. Gaining market share by charging lower prices (as a result of lower operating costs). This makes market segments less attractive and harder to enter for competitors. Your email address will not be published. This leaves a participating organization at risk and open to competition. A business strategy refers to the actions and choices that an organization utilizes to achieve its goals. Overuse of assets will cause the fixed costs to spread over the products, thus reducing per unit cost and achieving Economies of Scale.

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