Generic Strategy Alternatives

Porter's generic strategies describe how a company pursues competitive advantage across its
chosen market scope. There are three/four generic strategies, either lower cost, differentiated, or
focus. A company chooses to pursue one of two types of competitive advantage, either via lower
costs than its competition or by differentiating itself along dimensions valued by customers to
command a higher price. A company also chooses one of two types of scope, either focus (offering
its products to selected segments of the market) or industry-wide, offering its product across many
market segments. The generic strategy reflects the choices made regarding both the type of
competitive advantage and the scope. The concept was described by Michael Porter in 1980.

There is no one way to market your products -- each business is unique and should have its own

unique strategy. There are, however, four generic strategies that a business can use to create a

general outline of its marketing strategy.

Cost Leadership
The cost leadership strategy is a high volume, low margin strategy. Cost leaders offer lower prices
than their competitors in order to gain a large share of the market. Although profit margins may be
small for companies using this strategy, a large volume can allow for significant profits. Because this
strategy requires a large volume, it is better suited to large, multinational companies than to small
businesses.
Differentiation
The differentiation strategy involves creating unique products that are different from any other
offerings. When a company develops a unique product that consumers want, it is able to charge a
premium price for it. This means that companies who use the differentiation strategy generally sell
products at a higher price. In order to develop differentiated offerings a company needs to invest
heavily in research and development. The associated costs of research can make the strategy
difficult for a small business.
Cost Focus
Like the cost leadership strategy, the cost focus strategy aims to offer products to consumers at low
prices. But unlike the cost leadership strategy, which aims at the entire market, the cost focus
strategy focuses on a limited niche. For instance, a business might manufacture scissors designed
for left-handed people. The company might not have the lowest prices for scissors, but it could still
be a cost leader in the left-handed niche. Because the cost focus strategy caters to a smaller niche,
it is ideally suited to small businesses with limited resources.
 Differentiation Focus
The differentiation focus strategy is like the differentiation strategy, but like the cost focus strategy it
focuses on a specific niche rather than the market as a whole. Instead of creating unique new
products that appeal to everyone, the company designs its offerings for a narrow group. By focusing
on a narrow group, the company faces less competition than if it was developing products for the
general public.

What is Stability Strategy

Vinish Parikh March 19, 2011
A stability strategy refers to a strategy by a company where the company stops the
expenditure on expansion, in other words it refers to situation where company do not
venture into new markets or introduce new products. Stability strategy is adopted by
company due to following reasons –

1. When the company plans to consolidate its position in the industry in which
company is operating.

2. When the economy is in recession or there is a slowdown in the economy than

companies want to have more cash in their balance sheet rather than investing that
cash for expansion or other such expenses.

3. When company has too much debt in the balance sheet than also company stops or
postpones their expansion plans because if company takes more debt for expansion
than it would not able to pay interest rate on such debt and it may create liquidity
crunch for the company.
 4. When the company is operating in an industry which has reached maturity phase
and there is no further scope for growth than also company adopts stability strategy.

5. When the gains from expansion plans are less than the costs involved for such
expansion than company follows the stability strategy.

Stability Strategy
Definition: The Stability Strategy is adopted when the organization attempts to maintain its
current position and focuses only on the incremental improvement by merely changing one or
more of its business operations in the perspective of customer groups, customer functions and
technology alternatives, either individually or collectively.

Generally, the stability strategy is adopted by the firms that are risk averse, usually the small
scale businesses or if the market conditions are not favorable, and the firm is satisfied with its
performance, then it will not make any significant changes in its business operations. Also, the
firms, which are slow and reluctant to change finds the stability strategy safe and do not look for
any other options.

Stability Strategies could be of three types:

1. No-Change Strategy
2. Profit Strategy
3. Pause/Proceed with Caution Strategy

To have a better understanding of Stability Strategy go through the following examples in the
context of customer groups, customer functions and technology alternatives.

1. The publication house offers special services to the educational institutions apart from its
consumer sale through the market intermediaries, with the intention to facilitate a bulk buying.
2. The electronics company provides better after-sales services to its customers to make the
customer happy and improve its product image.
3. The biscuit manufacturing company improves its existing technology to have the efficient
productivity.

In all the above examples, the companies are not making any significant changes in their
operations, they are serving the same customers with the same products using the same
technology.

Read more: http://businessjargons.com/stability-strategy.html#ixzz4zx2gWaRp

Expansion Strategy
Definition: The Expansion Strategy is adopted by an organization when it attempts to achieve a
high growth as compared to its past achievements. In other words, when a firm aims to grow
considerably by broadening the scope of one of its business operations in the perspective of
customer groups, customer functions and technology alternatives, either individually or jointly,
then it follows the Expansion Strategy.

The reasons for the expansion could be survival, higher profits, increased prestige, economies of
scale, larger market share, social benefits, etc. The expansion strategy is adopted by those firms
who have managers with a high degree of achievement and recognition. Their aim is to grow,
irrespective of the risk and the hurdles coming in the way.

The firm can follow either of the five expansion strategies to accomplish its objectives:
1. Expansion through Concentration
2. Expansion through Diversification
3. Expansion through Integration
4. Expansion through Cooperation
5. Expansion through Internationalization

Go through the examples below to further comprehend the understanding of the expansion
strategy. These are in the context of customer groups, customer functions and technology
alternatives.

1. The baby diaper company expands its customer groups by offering the diaper to old aged persons
along with the babies.
2. The stockbroking company offers the personalized services to the small investors apart from its
normal dealings in shares and debentures with a view to having more business and a diversified
risk.
3. The banks upgraded their data management system by recording the information on computers
and reduced huge paperwork. This was done to improve the efficiency of the banks.

In all the examples above, companies have made significant changes to their customer groups,
products, and the technology, so as to have a high growth.

Read more: http://businessjargons.com/expansion-

strategy.html#ixzz4zx24Vvyq
Expansion through
Concentration
Definition: The Expansion through Concentration is the first level form of Expansion Grand
strategy that involves the investment of resources in the product line, catering to the needs of the
identified market with the help of proven and tested technology.

Simply, the strategy followed when an organization coincides its resources into one or more of
its businesses in the context of customer needs, functions and technology alternatives, either
individually or collectively, is called as expansion through concentration.

The organization may follow any of the ways to practice Expansion through concentration:

 Market penetration strategy: The firm focusing intensely on the existing market with its
present product.
 Market Development type of concentration: Attracting new customers for the existing
product.
 Product Development type of Concentration: Introducing new products in the existing
market.
The firms prefer expansion through concentration because they are required to do things what
they are already doing. Due to the familiarity with the industry the firm likes to invest in the
known businesses rather than a new one. Also, through concentration strategy, no major changes
are made in the organizational structure, and expertise is gained due to an in-depth knowledge
about one or more businesses.

However, the expansion through concentration is risky since these strategies are highly
dependent on the industry, so any adverse conditions in the industry can affect the business
drastically. Also, the huge investments made in a particular business may suffer losses due the
invention of new technology, market fickleness, and product obsolescence.

Read more: http://businessjargons.com/expansion-through-

concentration.html#ixzz4zx38NlBo

Retrenchment Strategy
Definition: The Retrenchment Strategy is adopted when an organization aims at reducing its
one or more business operations with the view to cut expenses and reach to a more stable
financial position.

In other words, the strategy followed, when a firm decides to eliminate its activities through a
considerable reduction in its business operations, in the perspective of customer groups,
customer functions and technology alternatives, either individually or collectively is called as
Retrenchment Strategy.

The firm can either restructure its business operations or discontinue it, so as to revitalize its
financial position. There are three types of Retrenchment Strategies:
1. Turnaround
2. Divestment
3. Liquidation

To further comprehend the meaning of Retrenchment Strategy, go through the following

examples in terms of customer groups, customer functions and technology alternatives.

1. The book publication house may pull out of the customer sales through market intermediaries
and may focus on the direct institutional sales. This may be done to slash the sales force and
increase the marketing efficiency.
2. The hotel may focus on the room facilities which is more profitable and may shut down the less
profitable services given in the banquet halls during occasions.
3. The institute may offer a distance learning programme for a particular subject, despite teaching
the students in the classrooms. This may be done to cut the expenses or to use the facility more
efficiently, for some other purpose.

In all the above examples, the firms have made the significant changes either in their customer
groups, functions and technology/process, with the intention to cut the expenses and maintain
their financial stability.

Read more: http://businessjargons.com/retrenchment-

strategy.html#ixzz4zx3cXvrs
Combination Strategy
Definition: The Combination Strategy means making the use of other grand strategies
(stability, expansion or retrenchment) simultaneously. Simply, the combination of any grand
strategy used by an organization in different businesses at the same time or in the same business
at different times with an aim to improve its efficiency is called as a combination strategy.

Such strategy is followed when an organization is large and complex and consists of several
businesses that lie in different industries, serving different purposes. Go through the following
example to have a better understanding of the combination strategy:

* A baby diaper manufacturing company augments its offering of diapers for the babies to have a
wide range of its products (Stability) and at the same time, it also manufactures the diapers for
old age people, thereby covering the other market segment (Expansion). In order to focus more
on the diapers division, the company plans to shut down its baby wipes division and allocate its
resources to the most profitable division (Retrenchment).

In the above example, the company is following all the three grand strategies with the objective
of improving its performance. The strategist has to be very careful while selecting the
combination strategy because it includes the scrutiny of the environment and the challenges each
business operation faces. The Combination strategy can be followed either simultaneously or in
the sequence.

Read more: http://businessjargons.com/combination-

strategy.html#ixzz4zx3ljvrK

Grand Strategies
Definition: The Grand Strategies are the corporate level strategies designed to identify the
firm’s choice with respect to the direction it follows to accomplish its set objectives. Simply, it
involves the decision of choosing the long term plans from the set of available alternatives. The
Grand Strategies are also called as Master Strategies or Corporate Strategies.

There are four grand strategic alternatives that can be followed by the organization to realize its
long-term objectives:
1. Stability Strategy
2. Expansion Strategy
3. Retrenchment Strategy
4. Combination Strategy

The grand strategies are concerned with the decisions about the allocation and transfer of
resources from one business to the other and managing the business portfolio efficiently, such
that the overall objective of the organization is achieved. In doing so, a set of alternatives are
available to the firm and to decide which one to choose, the grand strategies help to find an
answer to it.

Business can be defined along three dimensions: customer groups, customer functions and
technology alternatives. Customer group comprises of a particular category of people to whom
goods and services are offered, and the customer functions mean the particular service that is
being offered. And the technology alternatives covers any technological changes made in the
operations of the business to improve its efficiency.

Read more: http://businessjargons.com/grand-strategies.html#ixzz4zx3tjI7i

Strategic Variation®
Definition
Strategic Variation is the planned, calculated alteration in the stimulus or stimuli of an
®

exercise without altering any factor in such a manner that would constitute a change in goal.

The primary reasons for which variation must be strategically employed are:

1. Progression: all too often an attempt at making an exercise more difficult is just for
difficulty’s sake, not necessarily because it is ideal for the individual or goal
2. No single exercise offers a complete, full-spectrum challenge relative to any specific
context. Complementary exercises are required in order to produce context specific
comprehensive stimulation (and the context must be specified!)
3. To alter the mechanical wear on joints

The prerequisites to decision making for strategic variation are:

G.O.T.E.

Clearly defining the Goal of This Exercise as determined by goal of this specific workout (or
a portion of the workout), and how they relate to the overall, macro-goal are vital. Without
goal clarity, stimulus accuracy and relevance is unlikely and efficiency are likely reduced.

The Stimuli

All exercises and forms of exercise are comprised of the following factors:

1. Motion: specific joint motions and ranges

2. Position Maintenance: specific joint positions to be maintained during execution
3. Resistance profile: Specific variations in load throughout the range of motion
4. Support: specific foundation
5. Intention: degree of control, direction of push/pull, degree and type of focus, etc.
6. Effort: degree or percentage of momentary ability expended
7. Time: tempo, reps (set duration/effort), rest duration, workout duration, workout
frequency, etc.

The understanding of and strategic manipulation of these factors is the key to the safe and
efficient achievement of a goal and the creation of purposeful variation.

Appropriateness
 Control and tolerance are measurements for appropriateness in any change in stimuli for
variation or progression.

Importance in Exercise
Historically, variation is and has been utilized as a means to “shock the body” into change
or to “keep the body guessing”. Variation is often considered to be anything and
everything that is different – a somewhat haphazard approach which can actually
undermine a specific goal. If any degree of goal-oriented strategy was/is employed it is
commonly devised around a variety of magical, mystical, misguided, myth-oriented, gym-
science based rationales often inspired by misinterpreted sensation or the deception of
gross movement in terms of accurately identifying a stimulus-response relationship.

In general variation can be created for the following reasons:

1. Change for the sake of change (alleviate boredom)

2. Change in stimuli thereby affecting a different goal (knowingly or unknowingly)
3. Progression in order to generate a specific adaptation or response.
4. To complete the stimuli required to satisfy a specific goal
5. “Rotate your tires”

Strategy is not required to alleviate boredom.

Changing anything without knowing or caring about the goal doesn’t require strategy.
Progression, context specific comprehensive stimulation, and altering joint forces do require
considerably understanding and strategy.

Without a somewhat detailed understanding of the factors that comprise any exercise, and
make each exercise and form of exercise both different and similar, strategic manipulation
is impossible. Furthermore, if the specific Goal of the Exercise is not clearly defined then
strategy is virtually impossible.

All too often an exercise is made more difficult for no other reason than to make it “harder to
do”, or an attempt at making an exercise harder will lead to a change in stimulation that is
not optimal for or conducive to achieving the original goal. The reason to increase any
specific aspect of challenge in an exercise should be to stimulate a very specific response,
outcome, or adaptation. Progression is the blending of science and the skills of observation
 and delivery. It requires the constant and continuous assessment of tolerance, ability, and
control as well as an unwavering eye on the goal. The typical “harder must be better”
approach has seemingly worked for many people, and failed many more… that never return
to exercise. Strategies in dosage (increments of change) as well as exactly which factors
are to be manipulated require constant experimentation not only to identify appropriateness
and effectiveness, but also experiential influence.

Complementary Exercises are required to create full-spectrum stimuli with regard to

following goals:

1. Full Range of Joint Motion

a. The available range in certain joints
2. Full Range Contraction
a. Full shortening and/or lengthening of single vs. multi-joint muscles
3. Full Range Challenge
a. Moving full range is very different from being appropriately challenged full
range
4. Output vs. Skill
a. The stimuli for the improving strength is reduced as support is reduced
b. “Doing algebra during exercise makes it harder, but that doesn’t mean it’s
improving anything.”

Examples
Complementary Resistance (From an Otherwise Poor Resistance Profile)

A full range squat, no matter how low one goes, is not a full range challenge. The
Resistance Profile is that of constant increase on the way down and constant decrease on
the way up, both due to the associated changes in the moment arms to each joint. Typically,
it is the load that one can control at the bottom that determines the load chosen for the
entire range, but if it’s a challenge at the bottom it is not a challenge at or near the top due
to the loss of moments at the top.

If it is not possible to alter the Resistance Profile then one could consider Strategically
Varying the ranges and loads across subsequent sets or workouts by simply performing
deeper squats with the appropriate challenge/resistance and shallower “partial” squats with
greater resistance that would not have been possible at the greater depth. Although both
versions still do not offer an optimal Resistance Profile, at least the top portion of the range
does not go completely without the challenge it is inherently capable of incurring.

Full Range Challenge

Even if the complementary squats are performed as described above, two issues remain:

1. At the top of a squat the load has a zero moment to the hip so at that point there no
resistance to the hip musculature. We can’t call this a full range challenge due to the
limitation of the direction of resistance.
2. Normal ranges of hip extension continue beyond what is utilized in a squat and if the
goal is full-spectrum hip challenge, then hip extension must be loaded in another
way that allows an appropriate load/profile through the remaining range.
Remember, “use it or lose it.” It’s no wonder than virtually no one over 60 has full hip
extension beyond neutral or zero degrees. On a daily basis it is not stimulated,
therein one of the many flaws in the “functional training tenet – exercise should
mimic life” So no matter how fatigued the hip extensors get from squatting,
stimulation is far from complete.

“Full Range of Motion” vs. Full Contractile Range

The motion allowed in any single exercise is never full contractile range due to the
limitations in maintaining an appropriate resistance throughout large arcs of motion, and the
relationships between single joint and mutli-joint muscles.

Resisted elbow flexion from a position of full extension with the arm by the side (neutral
shoulder) allows for full shortening and lengthening of the single joint muscles, but not the
biceps. Full elbow flexion would have to be performed in or near full shoulder flexion to
create the opportunity for full biceps shortening. Conversely elbow flexion from full elbow
extension would have be performed in full shoulder extension in order to create the
opportunity to challenge the biceps from their fully lengthened state (assuming the
appropriate Resistance Profile has been created to generate optimal challenge at these
lengths.)

Ultimately, if full shortening and lengthening of single joint muscles is the goal, then static
joints must be strategically positioned such that the antagonistic mutli-joint muscles do not
become limiting factors in joint range due to passive insufficiency. Conversely, if full
shortening and lengthening of mutli-joint muscles is the goal, then multiple, complementary
positions of the static joints must be strategically employed, and the single joint muscles are
unlikely to reach their extremes of contraction due again to passive insufficiency. Again, no
single exercise is complete in this context.

“Rotate Your Tires”

Minute changes may not seem to be enough to satisfy the normal quest for variation, but
may be enough to influence the mechanical wear within a joint.

A virtually unperceivable change in the plane of shoulder motion via a two or three degree
alteration abduction (“width”) during a pressing or pulling exercise would typically be
considered insignificant and incapable of altering muscular stimulation, and this may be
true. But the precise regions of the contact surfaces that are being stressed can be altered
enough to “share the wear” if such variations are strategically employed over time.

For joints with fewer degrees of freedom such as knees, motion really can’t be altered
beyond simple variations in range on a given exercise, but miniscule alterations in joint
forces can be produced not only through understanding the mechanical realities of different
exercises (rather than the myths like those associated with leg extensions) but also via the
use of intention in employing frictional forces to skew the resultant of resistance ever so
slightly across the femoral condyles.

Output vs. “Juggling”

Trends in “functional training,” while still widely popular, have misled trainers and
consumers into believing that wobbly devices and exercises without support (back pads,
seats, etc.) are the most effective versions of exercise for any and all goals.

While this support-free version of exercise occasionally has its place depending upon the
individual, his/her current state of progression, and the goal, there is overwhelming
evidence that a) muscular output (strength) is a necessary prerequisite for such activities,
and b) these activities are poor ways of improving tension production (acquiring strength).

Full spectrum challenges would include exercises with strategically placed support to
provide an opportunity to optimally stimulate increases in tension production and strength in
strategic conjunction with exercises that require the juggling many factors and therein
create challenges in “coordination” and gross body control at the expense of stimulating
muscular output.
Misconceptions
“Biceps” vs. Balance

Progressing an arm curl by standing on one leg instead of two (as taught by a leading
accredited personal training certification) is certainly variation, but far from strategic. It
would be rare that the goal of an arm curl be anything other than elbow flexor stimulation.
Standing on one leg would reduce that stimulation by requiring less load due to the
orchestrated “down-regulation” of output to allow for the “juggle” of remaining upright.
Moving to one leg makes it more difficult, but not in a manner consistent with the original
goal of the exercise. The goal has unwittingly been changed.