Basic strategies
Basic strategies are fundamental, strategic alternatives that cover potential directions. They are distributed across two axles: Change degree and Dynamic. Change degree includes first-order changes (evolution) and second-order changes (revolution). Dynamic goes from contraction to growth. Fundamental strategies are distributed on the resulting surface (s. illustration) and describe the direction's general-purpose (e.g., reinvention means growth and 2nd level change). Basic strategies include defined strategies that will be implemented by respective strategic initiatives. The model reduces the variety of possible approaches to the defined basic strategies with their directions.
These basic strategies are reinvention, expansion, activation, consolidation, concentration, and closing.
Reinvention
Reinvention is looking for radically new ways that enable growth, e.g., use of new technologies, development of new products and services, and new business segments. This can lead to replacing old business models with modified, productive ones. Potential strategies are business model reengineering, diversification (e.g., new product segments), radical repositioning (concerning Product, Service, Market, Customer).
- Expansion
Expansion expands the existing approach step-by-step, e.g., new functions, styles, neighboring market segments. Established Business models are continuously extended. Possible strategies are kaizen (i.e., a continuous process improvement), Cooperation (e.g., joint ventures, merger), business process optimization (e.g., reengineering).
- Activation
Activation is a consolidation of the existing approach. However, the identity of business models and communication are improved, e.g., different corporate identity, values, appearance, communication measures. The current business model is retained but represented in a new way. Possible strategies are CI-development (i.e., image development), cultural development (e.g., the introduction of value orientation), and organizational development (i.e., development and communication of the value system).
- Consolidation
Consolidation stabilizes the existing business model with all its elements, e.g., revising products, services, governance, and business processes. The current business model becomes stronger and prepared for future tasks. Possible strategies are market strategies (e.g., concerning product, placement, and promotion), value strategies (e.g., focusing on value disciplines), or standardization strategies (e.g., certification, support of standardization committees).
- Concentration
Concentration liberates the existing business model from elements that do not belong to the defined core business, e.g., process optimization, loss of tasks that are not core business (e.g., outsourcing of logistics). Possible strategies are lean management (e.g., focusing on core business), competition strategies (e.g., economies of scale), and resource strategies (e.g., focus on core competencies).
- Closing
Closing focuses on the controlled dissolution of business models, e.g., shutdown of Enterprises or termination of co-operation. The respective business model disappears completely. A possible strategy is the disinvestment strategy (e.g., sale or dissolution).
Since each strategy is based on one of the available variants, there is no way to avoid defining the chosen path's actions.