3 Types Of Business Strategies And Why They Can Fail And Succeed

1. Differentiation Strategy:

Although this is often talked about in many media articles as being what every company should do, it is often said without context. It can succeed when the differentiation is aligned with the factors that both add value to customers and generate profits. It can fail when the differentiation either fails to directly or indirectly increase profits, focuses on vanity metrics such as revenue or the market is saturated with differentiated offerings to the point that the market no longer care about new differentiated offerings. Put another way, because of the multitude of variety it becomes incrementally harder to cut through the fog, because the market to some degree has become desensitised to anything that is not truly game-changing.

2. Cooperative Strategy: 

Companies focus on collaborative strategies for various reasons, and they range all the way from Supermarkets joining forces with the government to replace single-use plastic bags, and business cartels that negatively affect customers. In the long term, These often succeed when creating new benefits for customers, while they often fail when they undermine legal practices or negatively impact customers.

3. Multi-Domestic Strategy: 

Essentially, this is where you'll customise your offerings to different countries/regions. For instance, McDonalds' offer Ham N' Egg Twisty Pasta in Hong Kong, while offering unique vegetarian options in India (e.g. Pizza McPuff). This can succeed when the approach will leave you in a better position than offering one standardised offering (e.g. the iPhone), but can fail if the company does not have the infrastructure, insight and experience to effectively execute this strategy. For instance, McDonalds had to withdraw the McLobster from Canada because they didn't account for the rising cost of Lobster in the summer months. So keep in mind that cultural differences, value chain nuances and megatrends can play a factor here.

P.S. If you are currently having any issues with your business strategy, then I suggest that you: