A functional strategy is essentially sets of organizational plans of a firm comprising of human resource management methodologies as well as its marketing techniques. Market strategy is characterized by presence of research and all sets of development activities that are designed to primarily create sustainability in operational ability of a firm. Nonetheless, there are no standardized functional strategies. Therefore, each firm is obliged to structure its functional strategies depending on how it has been customized (Hunger & Wheelen, 2011).
Stability strategies are sets of business techniques that firms employ to maintain their position in the market and to consequently focus on increasing their productivity on due course. Stability strategies are more common in organizations that are substantially satisfied with their performance scores. Nonetheless, stability strategies are advantageous in situations where the market forces are not favorable and in small firms that are generally reluctant to change their operational agendas. However, the technique can be disadvantageous because it can make organizations to become reluctant in designing flexibility measures that are corner posts of creating competitive advantage in the market (Lucky, 2013).
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Cooperative strategies are conflict resolutions measures that are characterized by integrative bargaining that can create a win-win solution to the underlying conflicting parties (Mackey, Mackey & Barney, 2012). For that reason, the conflicting business firms or individuals tend to develop a mutual trust that can be beneficial and satisfactory to both of them. Therefore, it is logical to state that a cooperative strategy is a beneficial and constructive technique of coming up with substantial resolutions. On the other hand, competitive approaches arise when satisfactory solutions that could resolve the conflict at hand are limited. Therefore, unlike in cooperative strategies that create win-win solutions, competitive approaches create a win-lose solution where only one party stands to benefit. Hence, competitive approaches are destructive and can create distrust and animosity between participating parties (Mackey, Mackey & Barney, 2012).
Growth strategies are important in expanding the activities of firms. Internal growth is characterized by redirecting focus on internal market forces of a company such as the expansion of assets, sales and profits (Hunger & Wheelen, 2011). Internal growth provides organizations with opportunities of growing both vertically and horizontally. Therefore, as the company redirects its focus on developing domestically, it also creates a platform for growing at the international level as well. More importantly, internal growth tends to redirect more attention on its internal resources and sustainability strength that are aimed at achieving higher annual return in the long run. External growth is also structured to serve the same objectives as internal growth (Hunger & Wheelen, 2011).
However, most focus of the strategy is redirected at gaining international recognition, developing strengths to create a competitive advantage, growing globally and dominating or eliminating other competitors in the market through strategic alliances, mergers and consequently acquisitions. On that regard, internal growth is better than external growth because external growth is associated with a lot of uncertainty. For instance, it is difficult for a firm to determine its underlying market demands at the international level using the demographics that are there because of factors such change in currency valuation and inflations. Far from that, retrenchment can be described as a business strategy where companies or organizations tend to cut some of its business wings to reduce their operational costs and to consequently create sustainability (Mackey, Mackey & Barney, 2012).
Organizational policy impacts the strategy implementation as well as achievement of organizational goals by creating healthy platform for designing clear and achievable objectives. It also empowers firms to balance risks with their desired sets of outcomes alongside ensuring that goals that are coherent and in line with vision and mission of the organization are prioritized. In retrospect to that, organizational policies are also significant in the sense that they enable companies to design their plans and create work balance that can suit its operational ability. It also enables a firm to balance the needs of its primary stakeholders and consequently ensure that their supports have been won (Hunger & Wheelen, 2011).
A company’s portfolios guide its underlying decisions because portfolio decisions have to be based in a number of justifications. More specifically, a company’s choice to buy, sell, cut, exit or invest should be ideally guided by its primary structural strengths. Besides that, companies should also base their decisions on the opportunities that are there to improve its productivity or logistics. Finally, the state of the capital market relative to the net present value of future cash flows should also be put into consideration before making portfolio decisions (Lucky, 2013).
