Dominant business strategies define how businesses approach production, marketing and service. Owners make certain strategies paramount while downplaying other approaches. Company management focuses on a strategy, such as a marketing emphasis on quality, as part of a distinct business model that owners hope places the firm in the best competitive position. Large corporations blend dominant strategies, using one to sell one line of products and other approaches to market additional company products.
Companies using diversification as a dominant strategy begin operations in one key industry and then expand the firm by purchasing businesses or creating new firms. The additional firms, while not directly involved in the key industry, typically provide goods and services that enhance the original industry. A soft drink maker, for instance, might diversify to operate companies supplying glass bottles or aluminum soda cans. A new business focuses on start-up procedures, rather than working to diversify the company in the first few years of operation.
Firms using the dominant business model focused on cost make the decision to cut manufacturing costs or profit margins to offer consumers bargain-basement prices of goods or services. Companies operating in manufacturing fields making faddish products or items that are used and quickly discarded, such as low-priced clothing, frequently use this business strategy for a dominant operating practice. Businesses generating inadequate cash-flow also look to this dominant strategy to create rapid profits. Deep-discount operations and big-box stores use this business approach to purchase goods and determine operating procedures.
A focus on service sets some company strategies apart from the competition. The firm must incorporate the additional costs for service labor into the price of the final product, but the business determines that shoppers for their products will pay the additional cost to enjoy special assistance. High-end department stores and exclusive boutiques use the dominant strategy of service to win and retain customers.
Selecting a strategy with a dominant focus on goods means the firm has a wide, rich line of a particular type of goods or a variety of items for buyers in a select market. A brick-and-mortar or online store offering certain types of sporting goods or outdoor wear provides an example of a company using a dominant strategy focused on goods. The strategy selects only one group of goods to market, such as hiking boots, but the volume of those goods dwarfs other stores carrying complete lines of outdoor clothing, including boots. Customers of firms focused on goods identify the company name with the dominant marketing strategy, and this also helps to reinforce the firm's branding.
Businesses make conscious decisions in selecting dominant strategies for manufacture and marketing, but market forces also impact strategy approaches. When the competition successfully focuses on one strategy, a business can be forced to shift into a new dominant approach to stay in operation and effectively compete in the market. When a big-box store, for example, slashes prices with inferior goods, a company must shift to a strategy to stress service or match the competition with equal-quality goods at comparable discount prices.
- Blackwell Reference Online: Dominant Business Strategy
- Supply Chain Management: Cost as the Dominant Business Strategy
- Service Business Development in Small and Medium-sized Enterprises (SME) -- A Case Study on Methods and Tools Enhancing SMEs' Transformation to Service Dominant Business Logic
- California State University, Northridge: Strategy Formulation
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- The Oregonian: Taking on the Big Boxes -- An Office Supply Company Manages to Stay Competitive on Pricing While Boosting Service and Efficiency
- Eugene-Springfield Solidarity Network / Jobs With Justice: Big Box Stores
- Texas Perspectives Inc. and Gateway Planning Group: Big Box Retail and Austin [Texas]
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