A small company can use a number of business strategies, depending on its situation. For example, new companies may face different challenges than companies that are more established. Therefore, the business strategies they implement may be different from those of key competitors. Four types of business strategies include the Growth, Product differentiation, Communication, Advertising, Marketing , and Creative Strategies.
When business leaders have the mindset of constructing better tools for individuals and improving human potential then innovation becomes fundamental. When comparing the leaders of today’s top companies the common philosophy of how they remain innovative is improving the human factor consistently.
Most companies should adhere to a process oriented approach to being innovative. Business must be able to capitalize and commercialize on their innovations with other partners both internal and external. These companies must be able to actively engage its product in order to remain competitive.
One of the ways these companies continue to remain competitive is through cost leadership. Cost leadership is when a business is able to sell and produce its services and product at a lower rate that its competition. Another way is through differentiation. Differentiation is when a company differentiates its services and products by its benefits and features compared to other companies. Uniqueness is what drives this strategy. A company is able to charge a premium price and earn maximum profits. Differentiation is a more commonly used strategy for many businesses. This is mainly because there can be only one cost leader that sets everyone a part however, there can be multiple businesses that differentiate benefits and features of a product.
Another strategy is focus. Focus allows for a company to rule a certain niche market and maintain a competitive advantage. Businesses that succeed with a focused mentality comprehend customer’s needs in that market. This results in promoting and developing niche services and products that attract a high share of customers in that market. Competitive threat is minimal. When a business focuses on a particular target market then they have the best change in becoming the standard or leader in such market. Focus is the least costly and easiest strategy to follow. Sustaining a competitive advantage when using a focused strategy is simple
When a business narrows down its niche market they become less vulnerable where the competition is weak or it is unlikely to be replaced by a substitute. Research trends, psychographics, demographics and customer needs. When a business focuses on a target market they are able to contain the costs of their product and services. Promotion and advertising comes at ease because you are able to focus on your targeted crowd.
So how does a research and development initiative to which a company is involved in sustain long term competitive advantage? A focused strategy in research and development will allow for any company to earn profits both long and short term. A focused strategy is more lucrative than a plan that supports expansion.
With any business the overall environment factors within the organization impacts the success of the companies operation. The outside environment carries multiple factors that are out of any company’s control. If a company, manages the strengths of their operations and protect their business against outside threats then that’s one of keys to success and remain competitive short and long term.