Three Common Types of Corporate Growth Strategies — Jason Feintuch

Businesses are always trying to outdo each other on the size of their market share. They, therefore, come with different strategies to help them stand out. A strategy is necessary even for a business to survive the vicissitudes of the market. There are three corporate strategy examples that a company can adopt in line with their reading of the market. A company might have a strategy with some variation, but all are spin-offs or combinations of the three.

Cost Leadership Strategy

This strategy works best for companies operating in an environment where the price is an essential determinant of customers’ choices. Even when the cost is the primary determinant for customer decisions, buyers still have expectations for quality. Thus, when the business leaders are working towards reducing the cost of production to achieve cost leadership, they must also be careful to meet the customer’s definition of a quality product.

Cost leadership can be achieved by reducing the cost of production through strategies such as global sourcing or reducing the company’s margin. The earnings lost on a reduced margin can be recovered by selling more products and being in business for a long time.

For an ongoing business, the leaders need to determine how much of the market share they need to control to enjoy meeting the target revenue they need to meet. They should then scale up their marketing efforts accordingly. This breaks down corporate strategy vs. business strategy; cost leadership is corporate strategy while scaling up marketing is business strategy. This strategy is usually good for market penetration.

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