What is Stability Strategy
Stability strategy is the corporate level strategy that focused on stable the business (as its name) without investment or divestment to maintain the current position. Normally, the company adopts the stability strategy when they want to wait for some reason before the next expansion, or when the business unit is in the maturity stage which is no need to invest anymore.
There are three main stability strategies, which include: No change strategy, Pause or Process with caution strategy, and Profit strategy.
The situation that the company needs to adopt the no-change strategy are:
- The mature business unit which enjoying a high market share and high profit, while they need no investment to maintain their profit and market share (also known as a cash cow).
- When the company needs to take some rest before the next expansion.
- During the unstable market condition.
- The product or business unit is in the maturity stage which is no (or low) chance for growth anymore.
The stability strategy is useful in the short term when the company needs to stop for a short duration to make itself stable before executing the next strategy. However, in the long run, they can be dangerous since it stop the company’s progression.
No Change Strategy
No change strategy is a strategy the business unit needs to do nothing new but focus on maintaining the current operation without any change.
The company adopts the no-change stability strategy typically the company that competes in a low competition market or they are in a stable competitive position.
Pause or Process with Caution Strategy
Pause or Process with caution strategy is a strategy that the company waits and process with caution to wait for the next expansion opportunity.
Generally, the pause or process with caution strategy is adopted when the company needs to wait for some unstable external factors to be over.
Profit Strategy
Profit strategy is a strategy that focused on maintaining profit during a difficult situation from external factors such as recession, inflation, high competition market. The company adopts the profit strategy by increasing prices, cut-costs, reduce or stop investment to keep the company still profitable.
The profit stability strategy is a short-term strategy that is used to respond to an unstable situation.
