Background of the Study Many firms are formed each and every day, and some of them do not make it to achieve their goals and end up shutting down or filing for bankruptcy before their expected tenor Is reached. In the recent past, the global economy has experienced numerous downturns and the damage that accrues from this Is the collapsing of firms as well as the collateral damage is the loss of thousands of jobs. This situation, however, does not have to be like this if a company adhered to its business strategy and policy.
A firm strongly relies on a business strategy to guide its allocation of resources in the different sectors of the company. This includes the value network (suppliers, creditors, and clients), the incentives the business gives the stakeholders (employees, management, shareholders), and the guidance of the mission and villous of the company. 1. 2 History of the Study It is vital to note that a business strategy is separate and different from the company’s visionary objectives (the mission and vision of the company).
A business strategy and policy can, therefore, be described as a tool by the company that enables It to clearly state how It will achieve the vision and mission of the company. A clear example Is traveling; when someone Is traveling, the first thing they decide on Is their destination, the “how to get there” Is the analogical business strategy. In addition to this, business strategy and policy are the roadman that assists a company to win over the market, by creating and redesigning the way they do business.
For instance, it provides the basis for decision making on matters of product differentiation and lowering of cost. Therefore, it is vital to note that as the market rends change, so does the business strategy, all In accordance with the company’s business long term and short term objectives. 1. 3 Magnitude of the Study A management team in a company is responsible for the daily activities of the company in a quest to achieve the business objectives, which in most cases are the minimization of the shareholders wealth.
However, to achieve these objectives, the management of a company has to ensure they achieve the short term goal since these align with the long term goal (Ecological, Panorama, & Annelids, 2004). For instance; In the event that a company has a long term goal of twenty years, a two year goal is considered a short term one. The management has to ensure that the two year goal is achieved regardless of the changing market trends. This means that they have the utmost job of tuning the business strategy to suit their current way of doing business so that it does not compromise both their short term and long term goals. . 4 Comparison of Business Strategies and Policies between a Global Scale and a National One Business strategy and policy that are focused on the global market are en ones Tanat seek to prove goods or services to various people around ten world, while a national one is focused on a particular nation or section in a nation (Ben- Yokes, 2005). The majority of business strategies are national, although in the recent past, global business strategies and policies have emerged since more multinationals are coming up, more especially in the technology industry since their services are accessible around the globe.
These goals differ in some ways from national goals, since a market may be dominant in one nation and less dominant in another. The management team has to use a different business strategy to conquer the other market. 2. Study Questions and Objective of the Study Questions: What are the different types of business strategies and policies? How does each type propel a company in achieving its vision and mission? Objectives: To identify the different business strategies and policies utilized by companies and organizations.
To find out how each type of a business strategy enables a business to achieve its vision and mission. 3. Literature Review A business has multiple branches that work in unison for it to run, and so business tragedy and policy have to accommodate all these considerations when it is being made. Consequently, there are three types of business strategies, which include the following: 3. 1 A General Business Strategy This strategy encompasses the businesses; the means and ways of how an objective is to be achieved by a business.
This refers to the various tasks a company has to engage in and the resources at the disposal of the company. The general strategy is involved in creating a path that the whole company has to adhere to. This will mobile the value network, as well as reach out to the stakeholders in order to achieve a given goal (Friedman, Savage, & Goes, 2012). The management of a company has a significant role in that they have to ensure that the general strategy and policy are well known and referred to by the employees.
This is important since for a company to move ahead well, the employees have to share in the vision of the company. It is the role of the management team to ensure that they steer and motivate their employees in the direction of the general business strategy. In addition, the general business strategy utilizes tactics; these come in handy in the utilization of the resources allocated for a particular task. Therefore, the combination of both strategy and tactics plays a key role in the provision of means and ends. 3. Corporate and Competitive Strategy All companies have to define the industry in which they are involved in; this makes them susceptible to competition one time or the other. A firm that does not have competitors can be referred to as a monopoly and it is not eligible in this context (Haley & Haley, 2013). According to Porter (1980), a company has five reasons which create competition. They are the following: threat of new entrants, threat of bustiest products or services, bargaining power of suppliers, bargaining power of buyers, and rivalry among existing firms (Porter, 1980).
These factors make an industry competitive, and for a company to survive it has to adapt; here adaptation means coming up Walt various strategies Tanat make It attractive to ten consumer. Porter (1980) suggests that a company has to figure out how to combine the two economic organs of demand and supply so as two remain profitable in a highly competitive market. This can be achieved by the strategy of strategic scope (demand side) and strategic strength (supply side). . 2. 1 Cost Leadership Strategy This strategy is aimed at having the lowest cost of a product in the market.
The management of a company would employ this strategy in order to appeal to the cost conscious clients. However, in achieving this, the company has to operate at lower costs than the competitors. According to Porter (1980), this can only be achieved in three approaches; the first one is having a high asset turnover; this means that the company has to increase in the volume of its production so that the economies of scale and experience curves can be effectively utilized. For instance; in an airline, the management would have it that their flights turn around quickly so as to have more passengers on air.
The advantage that accrues from this for a company is the entry barrier that is created for new entrants, thereby ensuring that the company remains relevant in that period. The second approach is achieving the lowest operational cost than competitors; this is ensured by attaining a high output of standardized products, limiting customization of products, and ensuring no frill products. In addition, costs are kept low by using standard components, fewer products and omitting the number of models to ensure larger production runs.
For a management team to achieve this, they have to ensure they set their premises on areas that are low on rent, acquire cheap labor (outsourcing), and establish a cost conscious culture for the firm. Most of the companies in the US have been seen to utilize this approach, since most of them outsource in Asia. A clear example is Apple Co. With its offices in Virginia which has relatively low taxation as compared to California; the company also outsource the manufacturing of its items in China (Hellhole, 2009). The third approach is the control over the supply and procurement of the products.
Here, the management of a company has a specific duty of ensuring that they are in control of the number of goods and services that are being provided to the customers at any time. They also have to guarantee that they squeeze suppliers for the best offers at any time; this is an advantage since they get to enjoy discounts. It is a common notion that large companies are the only viable recipients to the cost leadership; however, this is not true since even small businesses can be cost leaders if they enjoy NY of the three approaches. 3. 2. Differentiation Strategy Here the main focus that the management of an organization has is how unique their product is when compared to the other competitors. The company has to ensure it appeals to the personal nature of the client; that is why most of the companies that opt for product differentiation have a price insensitive market. These firms also have one thing in common; they, in most cases, have talented personnel that works on their products ensuring that they remain relevant to their consumers (Glen Nines Severe Council, 2000).
There are a number of ways in which this strategy and policy work: one is the shareholder value model. This model has it that clients buy a product so that they can access the knowledge that comes from it. However, purchase is a onetime thing. This model seeks to maintain the knowledge of a product and launch it in the right timing. Two, the unlimited resources model; this model applies to Tells Tanat nave large cap tall Dados Tanat allows Tort continuous innovation, thus, blocking out the entry of new competitors.
However, this is only effective if the company is continuously innovative. 3. Focus or Leadership This kind of strategy is applicable if the firm has the available option of being a market leader; this is so in that the firm has to decide on whether to become a market leader or to focus its efforts on satisfying the needs of a certain section of the market (Symphonies, 2002). Either way, it has to ensure it limits the number of competitors in the industry so as to maximize on profits.
The company can also decide on a small target market and concentrate on the markets’ specialized needs or broad focus where the company’s attention is on the needs of the mass market. A strict example is the one illustrated by Toyota and Rolls Royce car companies. Toyota is well known for the production of multiple ranges of cars that suit the average income earner who wishes to own a car; they are also relatively cheap as compared to the later. However, Rolls Royce produces cars that appeal to the above average income earner whose wish is to own a comfortable car with personalized features.
Toyota, on one hand, has its cars produced in mass, while the latter has a more specialized process of ordering (Kissing, 2001). Either way, these two companies are able to remain relevant in their particular markets. . The Analysis The literature review has clearly shown that a business strategy is essential in any company in dealing with the competitors, as well as ensuring the goals of the company are met. The concepts of keeping competitors at bay are not different from achieving the goals of the company.
This is so since no firm wants to be trampled on by its competition, and if it does, it ends up losing its market share, and thus, its profits and then finally closing down. The literature review has, however, indicated the strategies that have been in place and that are followed by successful companies n achieving the goals they have by ensuring market domination through cost effectiveness, market leadership, target focus, and product differentiation. In the recent past, as I have shown in the illustrated examples, we have seen firms that have employed two of the business strategies and policies.
In the event that a firm was lucky enough or rather well managed to use the three strategies at a go, the company would be in a position to achieve market domination and realize great profits at the same time. This is the dream goal of any organization. However, like cost good things, it is difficult to achieve. It is vital to note that product differentiation is difficult to reach as compared to the other three, and it should be an option that is considered by firms that want to appeal to the high end clients. . Conclusion In my view, any business that wants to remain relevant in the industry has to have a smart and competent management team that is able to decide on the right strategy for the company at any time. If the strategy and policies in place are not applicable at the given period, the management has to be all hands on deck to promptly rectify the taxation. The strategy has to be the guide that maneuvers the company from competition to profitability regardless of the many players in the industry.