Business strategies are not to be confused with business models, as the latter is about how a company generates financing, revenues, and profits, while the former is all about market positioning and brand building around a specific product/service. There are multiple different approaches to strategizing a business, and none of them are obsolete or infallible. Nevertheless, with the test of time, the following five strategies have proven themselves to be the most successful ones today.
The primary idea behind cost leadership centers around leading the market in terms of cost, which is to say that the business with the cheapest product in a segment is the cost leader in that segment. Cost leadership is perhaps both the most popular and the most controversial business strategy, but the interpretation varies on how the company is achieving cost leadership. Nevertheless, depending on the market and industry, sacrificing quality in favor of lower costs often work wonders, even if those wonders come at the cost of reputation. On the other hand, lean management can streamline operations to a great degree, helping a business to sell their products at a lower price than others can afford to, without lowering standards.
The differentiation strategy can potentially be explained as a broader category that can encompass one or more of the other business strategies into it as well. When a company builds a brand/product/service or even its entire image around something that sets them apart from every other player in the segment, they are applying the differentiation strategy. Apple and Microsoft would be the two best examples where two companies have applied the differentiation strategy with perfection. Neither MacOS nor Windows really has any significant competition in the market, except perhaps to a limited degree, each other. There are both pros and cons of the differentiation strategy though, and you can learn more about them at advancepointcap.com.
Focused low cost is a popular business strategy, often used by companies in a highly saturated and competitive market. The strategy is applied especially within the B2C sectors, although not exclusively so by any means. The main idea is to boost sales and revenue generation by lowering the cost and, consequently, the company’s profit margin. It puts the brand at an immediate advantage over its competition and can help it to become popular much faster. The point to be noted here is that the business is neither degrading nor improving their product/service, but offering the same quality at a lower price than the competition. The mid-tier and the flagship Android smartphone segments are the best examples of focused low-cost strategies being applied on a massive scale, in a highly oversaturated market.
It is important to understand that business models can be changed, and most likely will be changed multiple times in the future to keep things in sync with the concurrent times. However, once you choose a business strategy and then build a product/service/sub-brand around it, changing it all up is much more difficult, although certainly not impossible. Give the subject its due consideration and consult experts in the sector if you can before finalizing or changing any of your present business strategies.