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A Capstone Experience(Factors and Trends that Influence Strategy Development)1 - Assignment Example

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Business managers, during these times, seem to implement retrenchment business strategy. There are three business strategies during an economic recession. They include retrenchment strategies, investment…
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A Capstone Experience(Factors and Trends that Influence Strategy Development)1
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Factors and Trends that Influence Strategy Development Majority of businesses experience harsh economic times during recession. Business managers, during these times, seem to implement retrenchment business strategy. There are three business strategies during an economic recession. They include retrenchment strategies, investment strategies, and ambidextrous strategies (Kitching, 2009).
Businesses often use retrenchment strategies. Businesses that adopt these strategies reduce their operation costs in order to cope during the harsh economic times. Furthermore, businesses involve in divestment of non-core assets. The businesses will save a lot of money in the long run. However, there will be reductions in employment, cuts on expenditure, and closure of establishments (Glynn, 2010).
Investment strategies involve the business spending on innovation and market diversification. Though it is a risky strategy, many businesses have begun successfully using investment strategies. Businesses will allocate a large portion of their capital towards short-term survival and innovation. Businesses will then exploit all its resources (Glynn, 2010).
Ambidextrous strategies are a combination of retrenchment and investment strategies. Businesses that adopt these strategies survive the recession period by cost and asset cutting. The businesses also invest a lot in product innovation and market development. Business managers have a task in choosing the right investment for the business and which cost to cut (Glynn, 2010).
In the new post-recession consumer behavior, there are certain factors useful to achieve product differentiation. The factors include good business location to create convenience for the customers, and price differentiation so as to give the customers value for their money.
Luxury goods are products which are not necessary; however, they make life more pleasant. Marketers of luxury goods should abandon their efforts to abandon premium pricing because their marketing focuses more on affluent mass markets. It would confuse market players because plenty of goods would not know whether to represent luxury or premium pricing (Silverstein, 2008).
It is advantageous to create customer value and satisfaction. Companies should formulate their marketing strategies while sticking to the societal attitudes. For example, Wal-Mart delivers its promises always charging low prices on goods.
References
Glynn Lowth. (2010). The impact of economic recession on business strategy planning in UK companies. Research executive summary series, 6(9).
Kitching, J. (2009). BUSINESS STRATEGIES AND PERFORMANCE DURING DIFFICULT ECONOMIC CONDITIONS. Kingston University.
Silverstein, M. J. (2008). Trading Up: Why Consumers Want New Luxury Goods--and How Companies Create Them. Penguin Group US. Read More
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