TYPES OF STRATEGIES

VARIOUS TYPES OF STRATEGIES

 WHAT IS STRATEGY?

❑THE WORD “STRATEGY” IS DERIVED FROM

THE GREEK WORD “STRATEGIA” WHICH
MEANS COMMAND, ART OF TROOP LEADER
OR GENERALSHIP.
❑STRATEGY IS A GENERAL PLAN TO
ACHIEVE ONE OR MORE LONG-TERM OR
OVERALL GOALS UNDER CONDITIONS OF
UNCERTAINTY
 WHAT IS STRATEGY?
❑A STRATEGY IS ALL ABOUT INTEGRATING
ORGANIZATIONAL ACTIVITIES AND UTILIZING
AND ALLOCATING THE SCARCE RESOURCES
WITHIN THE ORGANIZATIONAL ENVIRONMENT
SO AS TO MEET THE PRESENT OBJECTIVES.
❑STRATEGY CAN ALSO BE DEFINED AS
KNOWLEDGE OF THE GOALS, THE
UNCERTAINTY OF EVENTS AND THE NEED TO
TAKE INTO CONSIDERATION THE LIKELY OR
ACTUAL BEHAVIOR OF OTHERS.
TYPES OF STRATEGIES

❑COMPETITIVE STRATEGY
❑CORPORATE STRATEGY
❑BUSINESS STRATEGY
❑FUNCTIONAL STRATEGY, AND
❑OPERATING STRATEGY
1. COMPETITIVE STRATEGY:
●IT REFERS TO A PLAN THAT COMBINES THE
CLOUT OF THE EXTERNAL SITUATION.

●ALONG WITH THE INTEGRATIVE CONCERNS OF

THE PERSONAL STATUS OF AN ORGANIZATION.
THE COMPETITIVE STRATEGY AIMS AT GAINING A
COMPETITIVE ADVANTAGE IN THE MARKETPLACE
AGAINST COMPETITORS.

●COMPETITIVE ADVANTAGE COMES FROM

STRATEGIES THAT LEAD TO SOME UNIQUENESS IN
 EXAMPLE OF COMPETITIVE
There CAN BE SEVERAL
STRATEGY EXAMPLES BASED
ON THE FOUR PARAMETERS GIVEN BY
MICHAEL PORTER. SOME EXAMPLES ARE
GIVEN BELOW:
●1. COST LEADERSHIP: MICROMAX
SMART PHONES AND MOBILE PHONES
ARE GIVING GOOD QUALITY PRODUCTS
AT AN AFFORDABLE PRICE WHICH
CONTAIN ALL THE FEATURES WHICH A
 EXAMPLE OF COMPETITIVE
STRATEGY
 2. DIFFERENTIATION LEADERSHIP: BMW OFFERS CARS
WHICH ARE DIFFERENT FROM OTHER CAR BRANDS. BMW
CARS ARE MORE TECHNOLOGICALLY ADVANCED, HAVE
BETTER FEATURES AND HAVE GOT PERSONALIZED SERVICES
 3. COST FOCUS: SONATA WATCHES ARE FOCUSED TOWARDS
GIVING WRIST WATCHES AT A LOW COST AS COMPARED TO
COMPETITORS LIKE ROLEX, TITAN, OMEGA ETC
 4. DIFFERENTIATION FOCUS: TITAN WATCHES
CONCENTRATES ON PREMIUM SEGMENT WHICH INCLUDES
JEWELS IN ITS WATCHES. 
CORPORATE STRATEGY IS
2.HIERARCHICALLY
CORPORATE STRATEGY
THE
HIGHEST STRATEGIC PLAN OF THE
ORGANIZATION, WHICH DEFINES
THE CORPORATE OVERALL GOALS AND
DIRECTIONS AND THE WAY IN WHICH
WILL BE ACHIEVED
WITHIN STRATEGIC MANAGEMENT
ACTIVITIES.

IT IS A LONG-TERM, CLEARLY DEFINED

 EXAMPLE OF CORPORATE
STRATEGY
AN EXAMPLE MIGHT INCLUDE A GAS-STATION
COMPANY ACQUIRING A OIL REFINERY.
DIVERSIFICATION – A CORPORATE STRATEGY IN
WHICH A COMPANY ACQUIRES OR ESTABLISHES A
BUSINESS OTHER THAN THAT OF ITS CURRENT
PRODUCT.
 DIVERSIFICATION CAN OCCUR EITHER AT THE
BUSINESS-UNIT LEVEL OR AT
THE CORPORATE LEVEL.
3. BUSINESS STRATEGY

BUSINESS STRATEGY FORMULATES AT THE BUSINESS-

UNIT LEVEL. IT IS POPULARLY KNOWN AS THE
‘BUSINESS-UNIT STRATEGY.’

THIS STRATEGY EMPHASIZES THE BUILDING UP OF

THE COMPANY’S COMPETITIVE POSITION OF
PRODUCTS OR SERVICES.

BUSINESS STRATEGIES COMPOS OF A COMPETITIVE

AND COOPERATIVE APPROACH.
EXAMPLE OF BUSINESS STRATEGY

●CROSS-SELL MORE PRODUCTS

●MOST INNOVATIVE PRODUCT OR SERVICE
●GROW SALES FROM NEW PRODUCTS
●IMPROVE CUSTOMER SERVICE
●PRODUCT DIFFERENTIATION
●PRICING STRATEGIES
●TECHNOLOGICAL ADVANTAGE
4. FUNCTIONAL STRATEGY:
●. A FUNCTIONAL STRATEGY REFERS TO AN APPROACH
THAT POINTS UP A PARTICULAR FUNCTIONAL AREA OF
AN ORGANIZATION.

● IT SETS DOWN TO ACHIEVE SOME OBJECTIVES OF A

BUSINESS UNIT BY MAXIMIZING RESOURCE
PRODUCTIVITY.

●ONCE IN A BLUE MOON, FUNCTIONAL STRATEGY NAMES

DEPARTMENTAL STRATEGY SINCE EACH BUSINESS
FUNCTION FREQUENTLY DEVOLVES WITH A SECTION.
 EXAMPLE OF FUNCTIONAL
STRATEGY
MOST COMMON FUNCTIONAL STRATEGIES USED
IN MANAGEMENT ARE:
FINANCIAL STRATEGY
MARKETING STRATEGY
PRODUCTION STRATEGY
HUMAN
RESOURCES STRATEGY (PERSONNEL STRATEGY)
RESEARCH AND DEVELOPMENT STRATEGY.
5. OPERATING STRATEGY

●THE OPERATING STRATEGY IS THE FIFTH TYPE OF STRATEGY

IN STRATEGIC MANAGEMENT .

●IT GIVES FORM TO THE OPERATING UNITS OF AN ORGANIZATION. A

COMPANY MAY DEVELOP AN OPERATING STRATEGY. AS AN
INSTANCE, FOR ITS SALES ZONES.

●AN OPERATING STRATEGY IS PUT ACROSS AT THE FIELD LEVEL,

USUALLY TO ACHIEVE ON-HAND OBJECTIVES.

●IN SOME COMPANIES, MANAGERS DEVELOP AN OPERATING

STRATEGY FOR EACH SET OF ANNUAL GOALS IN THE DIVISIONS.
 EXAMPLE OF OPERATING
STRATEGY
●MCDONALD’S OPERATIONS STRATEGY BASED ON
COMPETITIVE PRIORITIES
●TO MEET THE ORGANIZATIONAL GOALS, THE OPERATIONS
STRATEGIES OF MCDONALD’S PLAY A VITAL ROLE. THE
COMPANY IS ABLE TO MAINTAIN AND CONTROL ALL OF ITS
OPERATIONAL ACTIVITIES.

●TOP MANAGEMENT OF THE COMPANY DEVELOPS ITS

OPERATIONS MANAGEMENT STRATEGIES AND THE SAME ARE
IMPLEMENTED BY DIFFERENT BRANCHES OF MCDONALD’S.
ALSO, THESE OPERATIONS STRATEGIES ARE CIRCULATED TO
OTHER FRANCHISEE BRANCHES IN A WRITTEN FORMAT.

● DIFFERENT OPERATIONS MANAGERS ALLOCATED AT

DIFFERENT BRANCHES OVERSEES THE MONITORING AND
CONTROLLING PART OF ALL OPERATIONAL ACTIVITIES.