What are various types of Strategies?

Generally, the below mentioned types of strategies are used by the organizations.

1. Stability strategy: this type of strategy is used by an organization in cases where the organization is satisfied with the current situation and therefore it does not want to move away from such a position. Consequently, in such a case, the organization goes for the stability strategy. However a stability strategy can prove to be effective when the environment of the organization is also stable. In most of the cases, this type of strategy is used by the organizations. The reason is that it is the least risky course of action. For example, the stability strategy will be adopted by an organization if it is satisfied by dealing with the same product or service, providing its services to the same group of consumers and maintaining the same market share. Sometimes, the organization is not adventurous enough to try new strategies and change its situation. However, the stability strategy can be adopted successfully by the organizations from a mature industry that has a static technology. But as a result of adopting the stability strategy, the managers may become complacent. In the same way, whenever a change arises in such an organization, the managers find it difficult to deal with such changes.

2. Growth strategy: growth is related with expansion and diversification of the business operations. Therefore, if the management of the organization is not satisfied with the present status of the company, or when changes are taking place in the environment of the organization, or if favorable opportunities arise, it will be helpful for the organization to adopt growth strategy as it helps in expansion and also in diversification. A growth strategy can be implemented in the organization through market development, product development, merger or diversification. In case of product development, the organization adds new products to the existing products or these new products replace the products that were offered by the organization earlier. On the other hand, in case of vertical integration, the organization may also decide to take backward or forward lines. In such a case, either the company may decide to produce its own raw materials or it may decide that it will process its own output in future. It is very important that the growth strategy should be controlled and planned in a proper way otherwise such a strategy may not be successful in achieving its objectives. Due to the reason that growth indicates effective management, it is always desirable to adopt such a strategy.

3. Retrenchment strategy: an organization may decide to retreat or the change from its current position for the purpose of improving its position or sometimes in order to survive. This type of strategy has to be adopted by an organization when the company is going through the times of recession, or the competition is tough, or there is a scarcity of resources and as a result, the resources need to be reorganized in order to reduce waste. In this way, even if the retrenchment or retreat strategy reflects a failure on the part of the organization to some extent, however it is very important that such a strategy should be adopted in order to ensure the survival of the organization.

4. Combined strategy: in case of large organizations that are working in a number of industries, there may be a need to adopt the combined strategy. In this way, a combined strategy reflects the mix of the strategies that have been mentioned above. For example, it is possible that a large organization may adopt growth strategy in one area and at the same time it may also adopt the retreat strategy in another particular area. For the purpose of making sure that the combined strategy turns out to be effective, objective decisions should be made by the managers that are taken, keeping in view all the relevant factors.