International business management :Determine the different business strategies - Essay Example

Therefore, for any organization, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and also it stakeholders. If we look at it from a broader perspective it is in the interest of business to operate within a healthy environment and economy. The key to any system effectiveness is whether the management monitors operation and outputs on an ongoing basis. Performance monitoring is a well established as an important element of the management process.

(Business Strategy for Sustainable Development, 1992) There are couple of business strategies that an organization can apply, which can help them achieve a better position among their competitors. Some business strategy include, cost reduction, differentiation and focus. We shall now discuss each of them. When it comes to cost reduction strategy the company focuses on reducing the economic cost below it competitors. However, if this strategy is implemented by many organizations or if no company faces a cost disadvantage in imitating a cost reduction strategy, then being a cost leader does not generate a sustained competitive advantage for the firm.

The ability of a valuable cost reduction strategy is to generate a sustained competitive advantage depends on that action or strategy being rare and costly to imitate. The completive strength of the low cost strategy is that it set the floor of the market price and also it provides attractive defences against competitive forces such as rival competitors, buyers, suppliers and many others. On the other hand, the most cited source of the cost advantage for any organization is its size. There is always a relation between the firm and its size, which is measured in terms of production and the cost measured in term of average cost per unit of production.

However, the optimal volume or production is reached when the average cost per unit of production is low. The low cost strategy works best when the