Every organization will establish business strategies that are designed to support their mission, vision and values, and achieve goals specific to their market, business and industry. Business leaders who take the time to analyze and understand their market, industry and the external environment can develop strategies that are most likely to promote business success. There are a variety of types of strategies that businesses may apply.
A business strategy that has proven to be very effective for Walmart can also work well for small businesses: the strategy of being a cost leader. Businesses that consciously choose to position their company as a provider of products or services at the low end of the pricing point compared to their competitors believe that they can make up in volume what they may forfeit in terms of a high price point.
Some companies choose to position their products and services at the high end of the competitive pricing scale. Brands like Lexus and Rolex are examples of this. Luxury brands appeal to a distinct group of consumers with ample disposable income and the desire to purchase exclusive products. Companies that choose this strategy are able to increase their ROI (return on investment) through product cost versus volume. Their customers may be fewer, but they will buy more expensively.
A niche-focused business strategy targets a narrow group of consumers with a product or service designed specifically to meet their needs. Health care products targeted to consumers with specific health concerns, such as diabetics, for example, are an example of this type of strategy. In the general consumer environment, niche-related products may target consumers with specific interests in sports, foods or leisure pursuits.
A mass market business strategy attempts to appeal to the broad range of consumers across many demographic categories. Mass market products include such consumer goods as detergents and other forms of household goods.