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A Capstone Experience(Factors and Trends that Influence Strategy Development)3 - Assignment Example

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Businesses use three strategies during difficult economic conditions. The strategies include the retrenchment strategies, investment strategies, and ambidextrous strategies.
Most companies use…
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A Capstone Experience(Factors and Trends that Influence Strategy Development)3
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Factors and Trends that Influence Strategy Development Business strategies usually guide businesses during the recessionary period. Businesses use three strategies during difficult economic conditions. The strategies include the retrenchment strategies, investment strategies, and ambidextrous strategies.
Most companies use retrenchment strategies. The strategies demand businesses to cut their operating costs and divest their non-core assets. All these processes happen in the short-term. Retrenchment strategies result to divestment of businesses, closure of plants, loss of jobs, and reduction in expenditure especially in marketing and training.
Investment strategies involve spending on innovation and market diversification. During the recession, businesses that use investment strategies implement strategic change that would not have occurred. The strategies are risky; however, most businesses have excelled in implementing strategic change. The strategies would see the business managers focusing on short-term survival. Additionally, the recession period deprives the business of its resources, therefore, failure in implementing the strategic change.
Ambidextrous strategies are a combination of both retrenchment and investment strategies. Businesses that adopt these strategies adapt under recession conditions by cost and asset cutting, and investment in product innovation and market development.
The factors to be considered to attain product differentiation during the new post-recession consumer environment is; good business location that creates convenience to the customers, and price differentiation which is giving the customers the value for their money.
Luxury goods are items that are not necessary for living, but are highly desired within a society. Marketers should not abandon their efforts to establish premium pricing because where luxury goes, consumers will follow. Luxury brands can charge premium prices as long as the integrity of the product is not compromised (Hayward, 2010).
Consumer attitudes have a benefit and demerit to the marketer. Companies have to set strategies based on how consumers think about their product. For example, Wal-Mart offers their goods at lower prices to attract more customers. Lower prices in Wal-Mart are a motivation employed by the store to market their product in these hard economic times (Dean, 2010).
References
Dean, G. (2010). Understanding Consumer Attitudes. Marketing Strategy.
Hayward, E. (2010). Where Luxury Goes, Consumers Will Follow. Boston college.
Pitta, D. A. (2010). Product strategy in harsh economic times: Subway. Journal of Product & Brand Management. Read More
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