A company is a structure that positions itself in constantly evolving markets, in order to respond to demand and, more specifically, to consumer needs. Depending on the context, it needs to determine its lines of development. It must also find the means to achieve its objectives. To do this, it must put in place a strategy that will enable it to achieve its objectives.
Corporate strategies
A company’s strategy must enable it to gain competitive advantages. The aim is to distinguish itself from its competitors, so as to do at least as well as them, if not better. It is in a company’s interest to preserve its success factors by making them difficult to imitate.
The main business strategies are as follows: Cost domination strategy, Innovation and technology strategy, Differentiation strategy, Cooperative strategies.
This video can explain it:
The strategy of cost domination
With this strategy, the company seeks to reduce its costs (fixed and variable charges) as much as possible, so as to be able to offer consumers goods or services at prices lower than those charged by its competitors.
A company adopting this strategy must therefore act on its costs: Supply costs, in particular by negotiating with suppliers, Production: find new processes to reduce costs without sacrificing quality, Distribution, marketing. This strategy is best suited to companies that are well established in their market and can benefit from economies of scale.
Innovation and technology strategy
To combat the competition, a company can distinguish itself from others through technological innovation, thereby gaining a competitive edge. Technological innovations can help differentiate a company from its competitors. It is therefore a strategy that is compatible with, and even a means of implementing, the differentiation strategy. It can also enable a company to create a new demand and respond to it, thereby positioning itself in a new market and displacing competitors.
The differentiation strategy
Here, the company must seek to differentiate itself from its competitors, in order to offer a unique product on the market. The advantage over competitors’ products can be commercial, qualitative, technical… The most important thing is that the consumer is aware of the added value of the product/service. They need to perceive the value created by the company. This is why we need to communicate massively in this sense.
Cooperative strategies
Instead of going head-to-head with competitors, a company may decide to cooperate with them, so that each can benefit from the advantages of the other. Cooperation allows each company to specialize in one activity, and to cooperate with other companies in other fields.