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Strategy and Decision Making

What is a Functional Strategy?

A functional strategy is a practical approach business use to ensure that a specific business unit achieves its objectives. It stems from the main institutional plan in structure and design (Sridharan, 2022). For example, the Apple company aims to ensure that it produces the most quality phones worldwide. However, for it does so, it has several sections that contribute to the attainment of a goal. A clear functional strategy would be examining a specific department, such as the one that deals with iPhone camera development. Through functional strategies, companies help section to attain their objectives through the optimization of resources allocated to them.

Stability Strategies in a Business

A stability strategy is an approach and the methods a business takes to ensure that it remains in the market. Companies that use a stability strategy have a high focus on their product and customer perception of the product and ensure that they actively engage customers and clients to create a continuous satisfaction environment (Rahutami et al., 2019). Apple Inc. has one of the most robust stability strategies in that it has created an online platform that involves continuous customer engagement.

Pros and Cons of a business strategy

A stability strategy helps an organization increase its confidence in the market. For example, adopting a no-change strategy ensures that an organization will concentrate on a specific task. The impact is that production will increase because employees are conversant with the production method. The disadvantage of continuously relying on one stable strategy is that it leads to ideological redundancy in the organization and discourages production. For example, if Apple Inc. employed the no-change stability strategy, customers would not be experiencing the product development they have witnessed in the past few years.

Competitive and Cooperative strategies

A competitive strategy is a collection of plans that a company has in place to ensure that it either withstands or outdoes competition from other businesses for whom they are operating in the same environment (Hoffmann et al., 2018). For example, Apple Inc. uses the differentiation focus strategy to ensure that its leading product, iPhone has unique features compared to the other phones in the market. A cooperative strategy is a situation where a business forms alliances with others to address common market challenges. For example, Apple Inc. works with other technology giants, such as Microsoft, to devise methods to ensure they address sustainability challenges together.

Tradeoffs (pros and cons) between an internal and an external growth strategy

A tradeoff is a decision-making process requiring a business to decide on a property, product, quantity, or quality or incur a cost to gain in other areas (Blau & Michaeli., 2018). Tradeoffs are usually applied during the internal and external growth of a business. The pros of trading off are that it gives the company a chance to do away with operations that are making it lose money internally and allows growing its product. The cons are that, if rushed, it may lose markets. For example, a company may lose its image on corporate social responsibility by adopting expensive production techniques other than using cheap, locally available labor.

Best international strategy and retrenchment

The best international strategy for businesses with a worldwide customer base, such as Apple Inc., is the multi-domestic strategy which involves modifying a product to address the market demands of a specific market (Sridharan, 2022). The approach ensures that the business responds to the customer demands of a specific market hence improving customer retention levels. Companies can also use the retirement strategy, which entails cutting the production of goods-producing minor profits. It helps businesses attain financial stability by focusing on the products that generate the highest profits.

References

Blau, Y., & Michaeli, T. (2018). The perception-distortion tradeoff. In  Proceedings of the IEEE conference on computer vision and pattern recognition (pp. 6228-6237). https://openaccess.thecvf.com/content_cvpr_2018/papers/Blau_The_Perception-Distortion_Tradeoff_CVPR_2018_paper.pdf

Hoffmann, W., Lavie, D., Reuer, J. J., & Shipilov, A. (2018). The interplay of competition and cooperation.  Strategic Management Journal,  39(12), 3033-3052. https://doi.org/10.1002/smj.2965

Rahutami, A. I., Kurniasari, W., & Prawihatmi, C. Y. (2019). Adjustment of Jepara Industrial Furniture Business for Business Stability. http://repository.unika.ac.id/id/eprint/22349

Sridharan, M. (2022). Functional strategy- What is it, and why develop one? Think Insights. https://thinkinsights.net/strategy/functional-strategy/