Types of Strategies
Having just stated that each business has a unique strategy, we must qualify that
point by noting that strategies tend to fall into a few major categories. A business
may pursue a truly unique strategy, or its strategy may incorporate elements of
several major categories. Nonetheless, one of the following strategic themes will
likely appear in a company’s business plan:
Category
• Superior products. A business will develop products so noticeably superior
to the competition that they can command premium prices. This requires a
large investment in research and development, and usually results in a
smaller market niche, since the majority of customers cannot afford premium
products. However, this model has been pursued with great success by
Apple, which occupies quite a large niche.
• Product line extensions. A company develops a product to fit every
conceivable product niche in the market. This approach works well in a
retail environment, where it is a competitive advantage to exclude competing
products by filling store shelf space. The approach can also be used to
combine products and services to provide a complete, end-to-end offering to
customers.
• Lowest cost products. A business obtains the bulk of all market share by
relentlessly driving down its costs, which allows it to maintain low price
points. This calls for excellent production and logistics processes.