Question

what are some drawbacks and risks to a broad generic business strategy? to a focused strategy? identify a company you know that has a business strategy that is too broad and generic in nature, or too focused. Explain your rationale

Answer 1

Focussed strategy is used by company to concentrate on a narrow segments, where company doesnt want to cover all the broad areas and just wants to be focussed on a few areas of interest. This helps the company to do indepth analysis of a particular segment, and thus a concentrated effort can specialise the company into the segment. Compared to braod and generic business strategy means, a very broad or various segments to be targeted, rather than being focussed to its core areas, the company tries to cover a broad area. The main drawbackk of the broad generic business strategy, is that the company cannot just be focussed into one specialised area, and thus it is not specialising or mastering in a specific segment, rather than just trying to focus on more broader perspective. A company cannot specialise in just one area, losing focus, the company may not be able to compete with firms that are focussed into the core segment. Focussed stratgies can be more beneficial for the companies, because the company would be more customer oriented and would be continuously thriving for product development and hence customers would be more satisfied. Focussed strategy also enables the companies to focus on devising new innovative ways of cost reduction, thus gaining a competitive advantage over its competitors.

Broad generic business strategy may be suitable for the companies which have products where competition is least, and the company is only concerned to expand its territories. Still it carries more risk as compared to focussed strategy company, because of its lack of specialisation on the product.

Let us take an example of a company which has broad generic business strategy. "Apple Inc" is following a broad generic strategy, where its focus is on a broader scale on how to eliminate its competitors like Samsung andd Huawei. Apple has come out with a product or techcnology which was much different than the larger players in the market, and thus its focus was only on broad business development and other broader areas.

Example of a Focused Business trategy is Pepsico. Since its inception in 1997, Pepsico has focused on its core product of beverages, and has strongly maintained its competitive position in the market. Its every business move was concentrated in the beverages segment, it acquired other beverages companies like Tropicana product in June 1998, South Beach Beverage company was acquired on October 2000, and so on. It has gained a lot through its concentrated focus strategy. It got cost leadership, entering into new market was made much easy because of its wealth of concentrated knowledge in the field. Also the customers are highly lowal because of its concentrated efforts.