Concept

Typology of business strategies

Résumé

Business strategies can be categorized in many ways. One popular method uses the typology put forward by American academics Raymond E. Miles and Charles C. Snow in their 1978 book on Organization Strategy. Miles and Snow identify three types of competitive strategies, those adopted by defender, analyzer and prospector types of organization, and a fourth, non-strategic type of organization, whose competitive behaviour is reactive to the perceived environmental conditions within which it operates. For convenience the reactor type of approach is often characterised as a form of competitive strategy. This is the most aggressive of the four strategies. It typically involves active programs to expand into new markets and stimulate new opportunities. New product development is vigorously pursued and offensive marketing warfare strategies are a common way of obtaining additional market share. They respond quickly to any signs of market opportunity, and do so with little research or analysis. A large proportion of their revenue comes from new products or new markets. They are often highly leveraged, sometimes with a substantial equity position held by venture capitalists. The risk of product failure or market rejection is high. Their market domain is constantly in flux as new opportunities arise and past product offerings atrophy. They value being the first in an industry, thinking that their “first mover advantage” will provide them with premium pricing opportunities and high margins. Price skimming is a common way of recapturing the cost of development. They can be opportunistic in headhunting key employees, both technical and managerial. Advertising, sales promotions, and personal selling costs are a high percentage of sales. Typically the firm will be structured with each strategic business unit having considerable autonomy. The industry that they operate in tends to be in the introduction or growth stage of its life cycle, with few competitors and evolving technology This strategy entails a decision not to aggressively pursue markets.

Source officielle

https://en.wikipedia.org/wiki/Typology_of_business_strategies

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