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Such businesses respond only when they are forced to by macro environmental pressures. This is the least effective of the four strategies. It is without direction or focus. Miles, Snow et al. (1978) have identified three reasons why organizations become reactors: Top management may not have clearly articulated the organization's strategy.
For example, a small business may face internal risks like losing key people or people becoming injured or sick. Or, it might be impacted by external risks like natural disasters or market changes.
Strategy as perspective – executing strategy based on a "theory of the business" or natural extension of the mindset or ideological perspective of the organization. In 1998, Mintzberg developed these five types of management strategy into 10 "schools of thought" and grouped them into three categories.
Strategic planning is an organization's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals.. Furthermore, it may also extend to control mechanisms for guiding the implementation of the strategy.
If a firm's business strategy could not cope with the environmental and market contingencies, long-term survival becomes unrealistic. Diverging the strategy into different avenues with the view to exploit opportunities and avoid threats created by market conditions will be a pragmatic approach for a firm.
In business strategy, it is important to distinguish strategic decisions which imply long-lasting commitments, from tactical decisions, which are short-term responses to the current environment. The strategic decisions define the evolution of state variables that provide a scenario in which current tactics are played out.
A business can use a variety of pricing strategies when selling a product or service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy. [ 1 ]
Growth planning is a strategic business activity that enables business owners to plan and track organic growth in their revenue. It allows businesses to allocate their limited resources toward a centered effort to adapt to changes in the industry driven by digital disruption and differentiate from competitors. The strategies and tactics ...