Generic strategy of your business: how to define it in 3 simple steps

Proposing a generic strategy for your business you are going to define some general guidelines that will characterize your competitive position, that is, where is it that you are going to attack. To define it we are going to use some tools that take into account several aspects:

• Focus.
• The strength of the business and the attractiveness of the industry.
• The news of your product and the market.

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Focus

It is necessary be clear about whether your brand is competing on cost or differentiation.

There is a third option which is the focus on innovationThis is for products that do not exist in the market, or even cases in which there is no defined market.

In all cases, it is also necessary to determine what portion of the market you want to target, always taking into account the budget to be invested. you can target the entire market or a segment of it. You have to focus on one of these options:

• Leader in differentiation throughout the market.
• Cost leader in the entire market.
• Leader in differentiation in a segment.
• Cost leader in a segment.

Business strength and industry attractiveness

To define this type of strategy, it will be necessary to establish the level of strength of the business and the attractiveness of the industry on the following scales: low, medium and high.

Depending on the intersection of the strength with the attractiveness, some strategies can be defined, among which I recommend:

• High attractiveness and high strength: search for dominance and maximization of investment.
• High attractiveness and medium strength: Evaluate leadership potential through segmentation.
• High attractiveness and low strength: blook for niches
• Medium attractiveness and high strength: iidentify growth segments.
• Medium attractiveness and medium strength: iinvest selectively.
• Medium attractiveness and low strength: bFind niches or consider the exit.
• Low attractiveness and high strength: iinvest at the level of maintenance.
• Low attractiveness and medium strength: rrestructuring.
• Low attractiveness and low strength: yesdeparture and timely abandonment.

Product and market news

For define strategies based on these variables, it will be necessary to clarify if it is a new product or if it is already on the market and, at the same time, if the market we are targeting already exists or not.

Depending on these options, in a double entry box we can define some strategies:

• Current Product-Current Market: penetration.
• New Product-Current Market: developing.
• Current Product-New Market: extension.
• New Product-New Market: diversification.

Synthesis

These tools are used to assess the steps to follow at any stage of your entrepreneurship. For a deeper and more complete analysis, it is necessary to identify in which part of the market, the industry, your brand and the products you sell are located and, based on that, develop with more precision the generic strategy of your brand.

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