Business – 6.2 Business strategy – Developing business strategy | e-Consult
6.2 Business strategy – Developing business strategy (1 questions)
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Alignment occurs when the selected generic strategy directly supports the firm’s stated goals (e.g., market share growth, profitability, sustainability).
- Cost Leadership: If the objective is to become the low‑price leader in a price‑sensitive market, a cost‑leadership strategy aligns by focusing on economies of scale, efficient production and tight cost control.
- Differentiation: When the aim is to command premium prices or build brand loyalty, a differentiation strategy aligns by investing in unique product features, superior service or strong branding.
- Focus (Niche) Strategy: If the objective is to dominate a specific market segment, a focus strategy aligns by tailoring either cost leadership or differentiation to the niche’s distinct needs.
Effective alignment also requires:
- Clear communication of the strategic choice throughout the organisation.
- Resource allocation that matches the strategic priorities (e.g., R&D for differentiation, process optimisation for cost leadership).
- Performance metrics that reflect the chosen direction (e.g., cost per unit, market share in the target segment).
When the strategic choice and organisational objectives are mutually reinforcing, implementation is smoother and the likelihood of achieving long‑term success increases.