Business level strategies are tactics used to beat the competition and establish dominance in a market targeted by many players. It interlinks functional strategies and corporate strategies in the hierarchy of enterprise strategies. These strategies essentially target both customers and competitors. For a business to stand out among competitors to reckon with it must not only acquire and maintain a strong customer base, but also water down competitors’ efforts. Effective business level strategies include cost leadership and differentiation (Hoskisson & Robert, 2008).
These strategies are subject to strong market forces that commonly compel businesses to alter them. However, if prudence is exercised in their execution these business-level strategies could prove invaluable in establishing market dominance.
Formulation of business strategies is based on two concepts; the market scope of the business and competitors available in the business. It includes five steps. The organization first set is objective. Then, it determines its competitive position in its field. Then, its quantitative targets are set; objectives are delegated to every department after which a performance analysis is done. Then, a strategy is selected.
Communication of business level strategies should be simple and inspiring without losing either its meaning or weight (Williams & Chuck, 2010). They are conveyed and based on real references from the market and customers. Employees are inspired, educated, and the strategies reinforced upon them for effective implementation. A personal touch would augment the seriousness of the strategy. It is interesting, latest media should be used to communicate the message, including social media, blogs and games.
Cost leadership essentially entails offering the best prices in the market while avoiding unprofitable endeavors. It requires policies that aid the company maintain a reasonable cost benefit ratio. Differentiation seeks to maintain a lock on customers by offering unique and improved products compared to other businesses that offer similar products. Toshiba offers some of the best prices for their electronics, because its production can sustain those prices. On the flipside, this has led some people to believe that Toshiba churns out sub-standard products.
Differentiation is a business strategy that makes a business stands out in a crowded market. Lamborghini has used this as a strategy by exploring the theme of concept cars. The company has sought and used popular themes to popularize their models. Implementation of a differentiation strategy requires creativity and innovativeness. The internet, through websites and social media, is a powerful tool in communicating this strategy.
Other business level strategies of importance include focused low cost and focused differentiation. These bear much semblance and are only slightly different. In essence, they aim at providing goods and services that are customized to specific customers. Precision is their goal, and they, thus, maintain a hold on specific customers. Popular car making companies like Volvo is increasingly adopting these strategies as the trend becomes more popular among car buyers. Car buyers are increasingly seeking uniqueness. They also tend to turn to companies that manufacture cars to customers’ specifications.
In conclusion, business-level strategies are schemes, which main purpose is to ensure a sustainable and substantial profit in a business by beating competition. Especially handy, they come in when the spoils in the market are divided among many players; these strategies are aimed at securing the lion’s share. Business strategies are the policies and actions that help businesses gain dominance over its competitors.