Stralser (2004, p. 153) defines strategy as a ‘bridge that connects the firm’s internal environment with its external environment, leveraging its resources to adapt to, and benefit from, changes occurring in its external environment’. Thus, strategy can be referred to as a decision-making process that transforms a long-term objective into daily activities that help achieving the long-term goal. It is a rather continual process of valuation, revaluation and analysis which acts as a constant guide to the organization. Some of the established strategies are as below.
Porter’s generic strategy
Michael Porter, one of the greatest management gurus has identified that a firm’s strength could be determined by the two parameters, differentiation and cost advantage (Porter M, 1998). Applications of these strengths result in three generic strategies. They are as follows:
- Cost Leadership.
The above mentioned strategies are called generic since they are not specific to any industry and all applicable to all types of industries. Let us see them in detail (Erdner K, 1993).
Cost Leadership strategy focuses on taking the leadership of cost of the product in the market. In other words, it is the method in which a company aims at monopolizing the price of product.
Differentiation concentrates on supplying things that are diversified in the market. In such a strategy a company focuses on being different and unique in the market.
Focus strategy concentrates on focusing on a narrow segment and becoming the leader in that narrow segment (Kotler P, 1998).
Growth based marketing strategies
The growth based strategies explain the path in which a company should grow. The growth of a company can happen based on the following ways:
Vertical integration is a process in which a firm is involved in different parts of production process. Vertically integrated companies generally fall under a common owner. The companies thus integrated take part in the different phases of the supply chain activity. Vertical Integration strategy is one in which the company tends to grow by increasing its suppliers upstream and buyers downstream.
Horizontal Integration, controversial to vertical integration, is a process in which a firm tends to grow by merging with another firm of the same level. This methodology concentrates in holding different outlets for the same product.
Intensification is the process of strengthening the growth of the company by integrating organizations that produce the same kind or related product (Bennett P D, 1988).
Conglomeration or diversification is a process in which two new companies with entirely different product lines merge together in order to win the market.
Innovation based marketing strategies
This is formulated depending upon a firm’s capacity to develop a new product through innovative ideas and research. It identifies whether a company is in the innovative path by inventing and incorporating a new technology every day. Based on the rate of innovation, a company could fall under the three categories. They are:
Pioneers stand as a role-model to innovation. Any new technology would be invented at the place of pioneer companies first.
Close followers are those who manage to be in-line with the current technology, though not be able to innovate at first. They enhance their technologies with that of the competitors.
Late followers are those who lie behind in a new technology. These organizations follow technologies that are outdated and are not on par with the current marketing trends.
Market dominance based strategies
Market dominance, as the name suggests describes the firm’s capacity to dominate the market in terms of financial aspect by holding the highest market share. There are four types of classification of firms based on the market dominance (Mentor P, 2010). They are:
Market leader is one that dominates the market and possess substantial share of the market. It adopts extensive distribution procedures and innovative business models.
Challenger is one which is dominant in the market but does not own the leadership. Challengers generally struggle and adapt aggressive strategies to become leaders.
Follower is one which is dominant in the market but does not struggle for leadership. Followers are contented with what they have and manage to retain in the same level.
Nicher is one that focuses its interest on a very narrow market and tries to find a prevalent place within that market.
Aggressive marketing strategies
Aggressiveness strategies define if a firm should grow or not and the intensity of its growth. There are four different types of aggressiveness strategies (Armstrong G, 2009).
Prospector denotes the type of company that is capable of exploring new opportunities and creating new markets by developing new products and services (Baker M J, 2007).
Analyzer denotes the type of company that does not take too much to risk but excel in a limited market or product in which it is specialized in.
Defender denotes the type of company that is in a more mature state and manages to retain its position by continuously delivering products and services that adhere to quality.
Reactor denotes the type of companies that do not have proper control over the external environment and are subject to be easily affected by external factors (John M, 2003).
There are so many types of marketing strategies that are prevalent throughout the world. It is up to the requirement and business model of the company to choose the appropriate marketing strategy in order to make its product reach towards the end customer.
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