STRATEGY

Business Strategy

Business Strategy

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant and factual information relating to the analysis of Business strategies. Business strategy has referred to approach and the actions which are created by the management for creating the successful people in the line of their organization. This is also concerned with the creation of the competitive advantage (Aaker, 1984, pp. 23-29), for the business in each strategic business units of their organization. From the point of many established companies and the new emerging organization particularly, growth is seen to be major principal of organization success. This paper will explore the alternative strategies relating to substantive and limited growth and also describe in which circumstances these strategies would not suitable for organization. This paper will also explore the appropriate future strategy for well known Hong Kong School, German Swiss international School (GSIS).

Discussion

Growth strategies

A company which is growing fast, has the capability to take the greater advantage of earning strong market share and increasing volume of profit and equity return. However, there are some managers who hesitate to grow quickly and prefer to move slowly with limited strategy movement.

Limitations for Growth

Following are some limitations which the organization might face in their business life cycle at any stage of their business.

Competitors having Strong Market Share

One of the key limitations for isolated business growth is that there are number of competitors having strong market shares (Lola, 2007, pp.616 - 641). This usually creates barriers for managers to imply new strategies and achieve greater market shares. A company which is using such strategy for maintaining their growth may miss out the opportunity to capitalize the untapped market for its product.

Pressure from Investors

Investors are considered as the back bone of an organization. Most of the decisions made by the management are influenced by the will of investors. For instance, many shareholders are primarily interested to make investment for a limited duration of time. Such investors invest their money just to make short term profit and withdraw their money, once they see potential in a new growing company (Harry, 1983, pp.247 - 265). In such situations, business manager may face some substantial pressure to limit or isolate their business strategies in order to fulfill the will of investors.

Future Hurdles

Removal of the unprofitable outputs units or assets, reduction of the work size in business, shrinking customer groups and product line, selling the business units etc. all comes under the umbrella of a phenomenon known as “retrenchment”. When business does not perform well and organization suffer with loses, such strategy can be useful for the longer run growth of business.

Human and Fiscal Stress

Implementation of retrenchment strategy often results in the shrinkage of human resource, causing further problem for managers. Although, the primary objective of management is to cut cost through workforce reduction, however it leads to some serious psychological and emotional consequences for the remaining employees. Once a company decides to reduce its workforce, it usually imposes negative effects on ...