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Most successful organisations develop strategies to deal with their particular environment that offers the company the strongest possible competitive advantage. In developing these strategies, questions that are commonly addressed include the following;

• Should we compete?
• If so, which markets should we compete in? 
• How should we compete?^[1]

As all business situations are different, there is no one strategy that is a best fit for all companies. However there are three types of competitive strategies that you could adopt depending on your position in the market and particular objectives:

Overall cost leadership

Organisations that follow this strategy aim to win a large market share by achieving the lowest cost of production and distribution to offer lower prices than competitors. "Aldi" supermarkets are viewed as an organisation that follows a cost leadership strategy with its approach to offer a limited number of quality products at low prices. Its emphasis is on minimising costs at all levels in the value chain, and is proven through its business philosophy, "top quality at incredibly low prices".  

Differentiation  

This strategy leads the organisation to concentrate on creating a highly differentiated product line and marketing program in order to become the class leader in the industry. Woolworths' supermarket business, with its theme 'the fresh food people' has been  particularly successful with its differentiation strategy, by positioning the business around the primary value of 'fresh', which is highly regarded by a large proportion of supermarket buyers.  

Focus/Niche

Organisations that follow this strategy are usually smaller firms that focus efforts on serving a few market segments effectively rather than dealing with the whole market. A company could either use a cost focus which aims at becoming a low cost producer for a niche segment or a differentiation focus which aims at differentiated products in the niche segment. Small deli's that focus on a smaller market proportion can be identified as organisations that follow this strategy.

In summary, it is important to pursue a clear strategy in order to succeed. Firms that do not pursue a clear strategy also known as the 'middle-of-the-roaders', often find it difficult to compete and establish a clear position and competitive advantage in the market.

^{[1] Kurtz, D. L 2008, Contemporary Marketing, Thomson}