The Business-Unit Strategy of Concentration
Asingle business unit employs a concentration strategy when theorganization wants to direct its operations on a single product. Theunique product gives the company an opportunity to invest asignificant amount of resources in production and marketing. Thestrategy gives the business an upper hand in garnering more profitshowever, a decrease in demand of the product may result insignificant losses.
The Business-Unit Strategy of Vertical Integration
Abusiness applies this strategy when in a competitive position thatallows the company to assume responsibilities done by others on itsbehalf. For instance, a company can take over the values chain thatwas previously provided by suppliers. Integrating theresponsibilities under one management results in cost stability,profits, and dominance in the market since competitors will have ahard time to emulate such a strategy.
The Business-Unit Strategy of Related Diversification
Relateddiversification happens when a business pulls its resources togetherand invests in another related industry. The company might sharerelations with the new industry such as production lines, location,technology, and customers.
The Business-Unit Strategy of Unrelated Diversification
Thistype of strategy occurs when a business invests in another industrythat is unrelated to its current activities to attract moreopportunities for growth. A company that plans to exit an existingbusiness might use unrelated diversification strategy to venture intonew activities.
Application of the Four Corporate-Level Strategies in a Hospitality Company
Fairmonthotel employs the strategy of concentration and relateddiversification in running its operations. The hotel only focuses onthe hospitality industry. Moreover, Fairmont merged with otherprivate companies in the hospitality business, Raffles, and Swissotelbrands to run under one organization in a single management platform(Baker, 2007). The strategy was applied to increase Fairmont’ssales and marketing in a global perspective. The move also earnsFairmont a competitive position that will be of significant threat toits competitors.
Baker,M. B. (2007, March 19). Fairmontdetails growth strategy.Retrieved fromhttp://www.businesstravelnews.com/Hotel-News/Fairmont-Details-Growth-Strategy
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