Classification of strategies of enterprise development



Strategic planning is a set of actions and decisions taken by the leadership that lead to the development of specific strategies designed to achieve their goals. The strategic planning process is a tool that helps in making managerial decisions. Its task is to ensure the process of implementing the necessary changes in the organization aimed at improving the efficiency of its functioning.

The strategy should provide a sustainable competitive position of the organization and achieving the main objectives. As criteria of an effective strategy are the following characteristics which are complementary and mutually reinforcing:

1) mental correctness — awareness that strategic management is a synthesis of science, art and practice of management;

2) situational — effective strategy integrates the characteristic features of the specific situation of key factors for the future;

3) uniqueness — the organization should be different from its competitors, this difference must be the basis for the strategic competitive advantages;

4) future uncertainty as a strategic opportunity — a modern strategy should be able to turn changes in the external environment to their competitive advantage;

5) flexible adequacy — in order to implement emerging in the external environment opportunities, strategic changes of the organization should be adequate changes in appearance.

Classification of strategies is complicated by the presence of many of the author's approaches and significant diversity. Most of these strategies can be determined simultaneously by several factors, which also complicates the classification. In this regard, it is useful to consider strategy on integrated blocks:

‒ basic strategy;

‒ strategy of achievement of competitive advantages;

‒ strategies of behavior in competitive environment;

‒ sectoral strategies;

‒ portfolio strategy;

‒ functional strategy.

The most common, the experience-proven strategies, referred to as base or reference, they reflect four different approaches to the growth of the organization and are associated with the change of state of one or elements: product, market, industry, position within the industry, technology. Each of these five elements can be in one of two States: an existing state or the new state.

The first group of strategies are the so-called strategy of concentrated growth associated with changes in the product and (or) market and do not affect the other three elements. If you follow these strategies the organization is trying to improve their product or to start manufacture new, not changing the industry. As for the market, the organization is looking for opportunities to improve their position in the existing market or the transition to a new market.

Specific types of the first group strategies are the following:

‒ strategy strengthening position in the market in which the organization is doing everything to this product on the market to win the best positions. For the implementation of this strategy requires large marketing efforts. The strategy also allows for the implementation of the so-called «horizontal integration», under which the company is trying to establish control over its competitors;

‒ strategy market development involves finding new markets for already manufactured products;

‒ strategy, product development, involving the solution of the problem of growth by the production of a new product and its implementation on already developed organization in the market.

The second group of strategies are business strategy, which involves the expansion of the organization by adding new structures. These strategies called integrated growth strategies. Typically, the organization may resort to implement such a strategy, if it is in a strong business, can not carry out the strategy of concentrated growth and at the same time, the integrated growth does not contradict its long-term goals. The company can carry out the integrated growth as by acquiring property, and by extension from the inside. In both cases, the change of position of the enterprise within the industry.

There are two basic types of integrated growth strategies:

‒ strategy of backward vertical integration aimed at the growth of the organization through the acquisition or strengthening of control over suppliers, as well as through the establishment of subsidiaries engaged in the supply;

‒ strategy going forward vertical integration, reflected in the growth of the organization through the acquisition or strengthening of control structures, located between the enterprise and the end consumer, i.e. over the distribution systems. This type of integration is beneficial in cases where mediation is very extended, or when an organization cannot find intermediaries with the quality level of work.

The third group of the business development strategies are diversified growth strategy. These strategies are implemented if the organization cannot develop further in this market with this product within this industry. Strategies of this type are:

‒ concentrated strategy of diversification based on the search and use of prisoners in the existing business for more opportunities for new products. Existing production remains at the heart of business, and new occurs on the basis of the opportunities that are enclosed in the commercial market, the technology used;

‒ strategy of horizontal diversification, involves finding growth opportunities in the existing market through new products, requiring new technology, other than used. With this strategy, the organization should focus on the production of technologically related products, which would use the existing capabilities of the organization, for example in the area of supply. Since the new product must be focused on the main consumer product, on the qualities he should be accompanying already manufactured product. An important condition for the implementation of this strategy is a preliminary assessment of the company's own competence in manufacturing a new product;

‒ strategy is conglomerate diversification, which consists in the fact that the organization is expanding due to the manufacture of new products not technologically related to the manufacture, which are sold in new markets. This is one of the most difficult to implement policies because its successful implementation depends on many factors (seasonality in the life market, the availability of the necessary sums of money).

The fourth type of business development strategies are reduction strategies. These strategies are implemented when the business needs a regrouping of forces after the long period of growth or in connection with the need to increase efficiency when there are recessions and cardinal changes in the economy, such as, for example, structural adjustment, etc. In these cases, use of strategies, deliberate and planned reduction. The implementation of these strategies is often held not painless for your organization. However, we must clearly realize that this is the same strategy of enterprise development, as discussed a growth strategy, and under certain circumstances they cannot be avoided. Moreover, in certain circumstances, it is the only possible strategy for updating business, as the vast majority of cases, the update and universal acceleration — mutually exclusive processes of business development.

There are four types of strategies targeted reduction of business:

‒ elimination strategy, which is a limiting case of reduction strategy and implement when an organization may not conduct further business;

‒ strategy of «harvest», involving the rejection of a long-term view of the business in favor of the maximum income in the short term. This strategy applies to unpromising business which cannot be profitably sold, but can bring income during the «harvest». This strategy involves reducing the cost of procurement, workforce and obtaining maximum income from the sale of existing products and continue to reduce production. The strategy of «harvest» is designed to ensure a gradual reduction of the business to zero to achieve the reduction period to maximize the total income;

‒ reduction strategy consists in the fact that the organization closes or sells one of its divisions or businesses to implement long-term change in the boundaries of doing business. Often this strategy is implemented diversified enterprises when one of the production does not fit with the others. Implemented this strategy and when you need to obtain funds for the development of a promising beginning of a new, more appropriate long-term goals of the business;

‒ strategy to reduce costs, the basic idea of which is to search for opportunities to reduce costs and to take appropriate measures to reduce costs. This strategy has certain distinctive features, which consist in the fact that she is more focused on eliminating rather small costs, and also that its implementation is in the nature of temporary or short-term measures. The implementation of this strategy is associated with a reduction of production costs, increase productivity, reduce hiring and even dismissal of personnel, the cessation of production of profitable goods and closing a profitable capacity.

References:

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