There are only three basic business strategies: a cost strategy, a unique product or service strategy, and a focus on a niche strategy. These strategies are important to know in order to write a good strategic business plan.
Successful retailers use a cost strategy to make money. Firms like Walmart and Costco are very good at getting products to their customers cheaply. Because this economy is good, they give their customers lower prices as a way to show how good it is for their business. Consumers don’t get all of the money they save from cutting costs, but they do. A lot of the money the business saves because it runs very efficiently is kept by the company and becomes profit.
It’s one of the three main strategies to be a cost leader or run a low-cost business. And it’s a strategy that can be used by any business, but especially by businesses that have been able to save money as they have grown bigger and bigger.
There are a few important things to remember about a low-cost strategy, though. The company needs to keep some of the money it saves to make more money than its competitors. So, being a low-cost producer isn’t enough on its own. When a company wants to make money, it needs to be cheap to run. It needs to be able to charge enough to keep some of the money it saves as profits. To know more about Corporate Tax, click here.
Differentiated Product and Services Strategies
The second main strategy is to make your products unique. There are people who try to make their products or services stand out from the rest. Nordstrom, a department store chain, is a good example of this because it has great service and a lot of good and high-quality things to choose from. It costs more to buy Nordstrom goods, though. The extra money isn’t a big deal to people, though. Why? To get so much for their money.
This strategy is used by businesses that want to stand out from their competitors. They compete on the unique features of their products or services. You must be able to charge customers more for these extra features than they cost you to make them. Differentiation needs to make more money than it costs, so it needs to be worth it.
If you think about it, the focus strategy is a mix of the cost and differentiation strategies. This strategy says that in some ways, a company is very good at cutting costs; in other ways, this company is very good at making its products or services stand out. A company may choose to take this hybrid approach because it knows a specific group of customers or type of product better than anyone else. In other words, the company can serve a specific market better than anyone else. They will be the best in a certain field of work.
Target is a retailer that focuses on suburban, middle-class customers by giving them almost the perfect mix of cost savings and unique products.
This was in nutshell about the business strategies to know more about, Income Tax in India, click here.
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