Business Strategy

An overall strategy for a firm that coordinates the separate functional areas of a business. It defines the business objectives. analyses the internal and external environments, and determines the strategic direction of the firm. Each firm operates in a competitive environment and seeks to formulate a strategy that will provide it with an advantage over its rivals: design, quality, innovation, and branding are examples of ways in which *competitive advantages may be established. Some firms may seek to diversify into new markets, either through *internal growth (i.e. by expand­ing their existing products or introduc­ing new ones) or by *external growth through mergers, takeovers, joint ven­tures, or strategic partnerships (see DIVERSIFICATION). Each of these methods carries different levels of risk.