Strategic Management
Strategic management is the process of effectively aligning the organization’s resources with its objectives and goals. It involves the identification, analysis and implementation of strategic plans to ensure the successful implementation of the organization’s plans. This article will discuss four different types of strategic managements: growth strategy, defensive strategy, offensive strategy and cooperative strategy.
Growth Strategy
Growth strategy is the simplest of all the strategic managements and is focused on expanding a business by taking advantage of existing markets and opportunities. Growth strategy can be pursued by organic or inorganic methods. Organic methods involve the expansion of the current business by developing new products and services, entering new markets, or increasing physical locations or staffs. Inorganic methods involve mergers, acquisitions or alliances that give the business access to new customers and capabilities. Growth strategies tend to be more suited for companies that have a clear market opportunity or competitive advantage.
Defensive Strategy
A defensive strategy refers to strategies that are meant to protect an organization’s current competitive position. This includes activities such as cost cutting, diversification and consolidation of operations. These strategies are used to reduce the competitive threats posed by other companies and by strategic industry movements. Defensive strategies can also be used to preempt competitive moves, such as through a process of preemptive marketing or aggressive pricing.
Offensive Strategy
An offensive strategy is used when an organization seeks to gain a strong competitive advantage in the marketplace. This can include activities such as product development and innovation, brand building, aggressive marketing and the use of unique distribution channels. Offensive strategies often require large investments in research and development, marketing and operations.
Cooperative Strategy
A cooperative strategy refers to strategic alliances between two or more companies. These alliances are created in order to gain competitive advantages over other companies in the market. This can include joint ventures, joint research projects, shared production facilities and pooling of resources. This type of strategy is often beneficial when two or more companies have complementary competencies and resources.
Conclusion
In conclusion, strategic management involves the processes of aligning organization resources with its objectives and goals. There are four major types of strategic management, including growth strategies, defensive strategies, offensive strategies and cooperative strategies. Each of these strategies has their own advantages and disadvantages and must be carefully considered when implementing a strategic plan.
