What are Strategies in Strategic Management Types-Frequently Asked Questions-Types of Strategies in Strategic Management

Types of Strategies in Strategic Management

Strategic management, which comprises the development and implementation of various strategies, is critical to an organization’s long-term success. Each of these strategies’ corporate, business, and functional levels contributes uniquely to the attainment of an organization’s goals. Organizations can improve their overall resource allocation and decision-making processes by employing these tactics, which may include growing into new areas as well as diversifying within established ones. Read on to discover everything there is to know about types of strategies in strategic management and to become a subject matter expert on it.

A thorough understanding of the many business strategies at one’s disposal is required for effective strategic management. Organizations can develop a strong presence in their respective markets by implementing competitive tactics such as differentiation and cost leadership. By bridging the gap between an organization’s internal capabilities and external opportunities, these strategies generate a long-term competitive advantage.

Types of Strategies in Strategic Management

Corporate-level strategies guide a company in selecting investments for its portfolio, which the company uses to address strategic concerns. Companies can also employ techniques like diversification and vertical integration to enhance their profitability and market presence. Vertical integration is an example of this. Growth-oriented methods to strategic management are based on the increase of the organization’s market share and customer network. Organizations can strategically capitalize on developing trends and establish a strong presence in highly competitive sectors by executing strategic efforts such as market penetration and product innovation. Here is an overview of types of strategies in strategic management with a detailed explanation for your better understanding.

Strategies at a Functional Level

The functional level of a company’s strategy is tailored to satisfy the unique needs of each division. So, decisions about branding and advertising are critical components of a marketing plan (see Coca-Cola’s prior campaigns). It is feasible to improve production processes by using operational ideas such as Toyota’s lean manufacturing. Human resource strategy drives employee engagement and development, both of which contribute to Google’s reputation as an exceptional employer.

Collective Efforts

Alliance techniques foster collaborative efforts to achieve common aims. The equity relationship is related to Starbucks and PepsiCo’s coordinated marketing plan for bottled beverages. So, this agreement calls for a mutual transfer of equity between the two corporations. Because Microsoft and Nokia’s relationship on Windows phones is not an equity alliance, neither business has a vested stake in the other’s success.

Strategies for Withdrawal

Retrenchment tactics are implemented to improve the organization’s declining performance. For example, IBM’s successful transition from hardware to services required the corporation to reverse a deteriorating trend in its financial performance. Divestment refers to the process of divesting General Motors of non-profitable companies such as Saab. Toys “R” Us is undergoing liquidation, resulting in the closure of all its locations and the liquidation of its assets.

Methods of Cooperation

Collaboration-based techniques emphasize the formation of mutually beneficial collaborative connections. The Barnes & Noble and Starbucks collaboration exemplifies a strategic alliance with mutual asset leverage. Joint ventures (such as Sony Ericsson’s mobile phones) pool their resources in order to achieve a common goal. Mergers and acquisitions, such as Disney’s purchase of Marvel, are a frequent way for corporations to expand by combining their resources.

Methods of Competing

The primary goal of competitive tactics is to gain a competitive advantage. Amazon maintains its Cost Leadership position, resulting in lower expenses as a result of the organization’s streamlined processes. Products that stand out, such as Tesla’s breakthrough electric vehicles, usually gain significant notice. Lululemon’s success can be attributed to its smart market segmentation, which is limited to yoga lovers and other comparable consumers.

Methods of Vengeance

Retaliatory measures are used in response to adversarial hostility. Samsung’s escalation, typified by increased advertising expenditures in response to the arrival of Apple’s iPhone, is similar to competitors’ techniques. McDonald’s is lowering the prices of select products in reaction to Burger King’s price cuts; consequently, Low Price is competitive.

Business-wide Tactics

Corporate strategy is defined by constraints on the nature, scope, and future trajectory of an entire organization. Diversification, vertical integration, and foreign expansion are examples of such methods. General Electric, like many other conglomerates, has diversified by entering markets that appear to be unrelated. Moreover, Apple effectively retains control over its hardware and software by utilizing vertical integration, a supply chain management method that necessitates ownership of numerous divisions. McDonald’s sees worldwide expansion as an opportunity to enter previously untapped international markets. In general, this helps firms increase their earnings.

Methods of Self-defense

An organization can protect itself from external threats by using defensive methods. By launching the “Pepsi Challenge” in response to Coca-Cola’s “Pepsi Challenge,” Pepsi, for example, launched a counteroffensive. Google releases free web applications as part of a defensive strategy meant to anticipate the activities of the company’s competitors.

Techniques for Innovating

Innovation strategies promote creativity and uniqueness. Businesses that invest in product innovation, like Apple, introduce new and improved items to the market. Although, Toyota’s lean manufacturing strategies, known as Process Innovation, aim to optimize workflow. Uber’s revolution in the taxi industry, which substantially impacted how products are delivered to consumers, represents a well-known example of business model innovation.

Alternative Plans

Exit strategy may include the decision to withdraw from specific markets or industries. Moreover, borders is currently undergoing liquidation, which means that the company will close every single store and sell their assets. Kodak’s technique “Harvest” for transitioning from film to digital photography is designed to maximize the exploitation of the company’s remaining assets.

Expansion Methods

The goal of a company’s growth plan is to increase its market share. Therefore, Starbucks achieves market penetration by expanding its retail base in existing markets, driving sales in those regions. Netflix is implementing market development by expanding its existing product lines into new territories. Product development enables the introduction of new products into established markets, as demonstrated by Apple’s recent iPhone model releases. Moreover, the Virgin Group’s diversification strategy aims to penetrate and grow in new areas and product categories.

Solutions for a U-turn

The goal of turnaround methods is to save failing businesses. So, the goal of Ford’s broad reorganization approach, known as Operational Restructuring, is to boost productivity. In common parlance, “financial restructuring” refers to Chrysler’s insolvency and subsequent reorganization.

Interventions for Maintaining Calm

The purpose of stability approaches is to keep things as they are so that operations can carry on as usual. The beverages and snacks that make up the majority of PepsiCo’s activities serve as the foundation for the company’s concentration strategy. Microsoft’s Pause/Proceed with Caution approach, which explains the Windows Vista release delay, includes an assessment. This technique is implemented before the launch of new product lines. Hershey’s will continue to produce the same items because the business has no intention of changing its original chocolate formula.

“Blue Ocean” Approach

The Blue Ocean Strategy prioritizes the development of undiscovered, lucrative markets. Although, businesses must constantly innovate to keep their competitors at bay. In addition, Cirque du Soleil effectively established a completely new genre within the domain of performance art by combining theatrical and circus components.

Strategies for Businesses

In general, a company’s business plan will include the techniques it will employ to compete in its target markets. Walmart’s “cost leadership” approach relies around maintaining competitive pricing. Apple’s “differentiation” approach relies around providing superior products and services at greater prices. Niche perfume companies use concentration tactics to meet the needs of specific consumer segments in specific geographic areas.


To Begin, what Exactly are Business Strategies?

Corporate strategies define the scope and trajectory of an organization’s activities. Diversification, vertical integration, and foreign expansion are examples of such methods.

The Definition of a Turnaround Plan

The goal of turnaround plans is to reverse a company’s negative trend and restore financial sustainability, as demonstrated by IBM’s successful shift from hardware to services.

What does a Plan for Expansion Entail?

Expanding into new areas, boosting market penetration, introducing innovative products, and diversifying the company’s service and product portfolio are all components of a growth strategy.


Collaboration is becoming more common as more firms seek mutually beneficial relationships. Mergers, joint ventures, and strategic alliances are just a few instances of how strategic management may be used to boost a company’s market presence and make the best use of shared resources. Competitive strategies, whether defensive or offensive in nature, are virtually always the product of competition dynamics. Also, these methods allow firms to maintain a competitive advantage by predicting and retaliating against their competitors’ activities. Thank you for reading the guide on types of strategies in strategic management. Explore the website to keep learning and developing your knowledge base with additional useful resources. Read this detailed white paper to gain a more comprehensive understanding of swot analysis in strategic management subject.

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