Strategy

ITWW has helped many business’s with strategy plans
A business strategy is the means by which it sets out to achieve its desired ends (objectives). It can simply be described as a long-termbusiness planning. Typically a business strategy will cover a period of about 3-5 years (sometimes even longer).

A business strategy is concerned with major resource issues e.g. raising the finance to build a new factory or plant. Strategies are also concerned with deciding on what products to allocate major resources to.

Strategies are concerned with the scope of a business' activities i.e. what and where they produce. For example, BIC's scope is focused on three main product areas - lighters, pens, and razors, and they have developed super factories in key geographical locations to produce these items.

Two main categories of strategies can be identified:

1. Generic (general) strategies

2. Competitive strategies

The main types of generic strategies that organisations can pursue are:

1. Growth i.e. the expansion of the company to purchase new assets, including new businesses, and to develop new products. The Inland Revenue has expanded from being just a tax collector, to other functions such as collecting student loan repayments and paying tax credits.

2. Internationalisation/globalisation i.e. moving operations into more and more countries. For example companies like Gillette, Coca-Cola, Kellogg's, and Cadbury Schweppes are major multinationals with operations across the globe.

3. Retrenchment involves cutting back to focus on your best lines. The Americans refer to this as 'sticking to the knitting' - i.e. concentrating on what you do best.

Strategy, the competitive advantage

Competitive strategies are also important. Competitive strategies are concerned with doing things better than rivals. To be competitive a firm shouldn't just copy the ideas of rivals. They should seek to out compete rivals. There are two main ways of being competitive.

1. by selling goods at lower prices than rivals. This is possible when a firm is the market leader and benefits from economies of scale.

2. by differentiating your product from those of rivals - which enables you to charge a higher price if desired.

The airline industry is divided into two main segments. At one end of the market are the premium price category firms such as British Airways that concentrate on differentiation. They offer better service to passengers, more legroom, in-flight entertainment, and more individualised attention.

At the other end of the market the emphasis is on being the low cost producer and is exemplified by 'no frills' airlines such as Ryanair. Ryanair focuses on short haul destinations and keeping its planes in the air as frequently as possible in a 24 hour period.

Economies of scale - The advantages that large firms have from producing large volumes of output enabling them to spread their costs over more units of output.

Differentiation - Making a product different from rival offerings e.g. through packaging and labelling, customer care, additional extra features, etc.

Planning effective marketing strategies for a target audience

Creating value through the marketing mix
This case study focuses on the marketing strategies used by Aldi to increase its market share and encourage loyal customers.

Using new product development to grow a brand
As a result of carefully reading the Case Study, students should be able to: appreciate the need to make decisions that help to manage, maintain and develop the value of brands, appreciate the importance of market research processes and the questions that market researchers seek to answer, link processes of market research with a range of products that closely meet consumers’ needs.

Creating a winning marketing mix
This case study describes how JD (part of the JD Sports Fashion PLC Group of companies), a large and well-known retailer, manages the balance of its marketing mix around its consumers' needs in order to achieve business growth.

Using sponsorship to increase brand awareness
This case study illustrates how Infiniti formed its partnership with the Red Bull Racing F1 team to increase its global brand awareness, enter new markets and increase its market share in the luxury car market.