Stability Strategy

Definition 1: Stability strategy is not a ‘do nothing’ strategy. It involves keeping track of new developments to ensure that the strategy continues to make sense. This strategy is typical for those firms whose products have reached the maturity stage of product life cycle. Small organizations may also follow stability strategy to consolidate their market position and prepare for the launch of growth strategies.

Features of Stability Strategy

Stability strategy is followed by the company in case the company is in the same business, same market, and same product and with same customers, but the company focuses on incremental improvement of functional performance.

Following are the features or characteristics of stability strategy-

1. To safeguard its existing interests,
2. To safeguard strengths,
3. To pursue well established and tested objectives,
4. To optimize returns on the resources committed in the business and maintain operational efficiency on a sustained basis,
5. To continue in the chosen business path,
6. To consolidate the commanding position already reached.

Memory code – ISO Returns C

• Interest safeguard
• Strength safe guard
• Objective safe guard
• Returns safe guard
• Chosen business safeguard
• Consolidate commanding position reached

Reason for Stability Strategy

1. Less risky – Stability strategy is less risky, involves less changes and people feel comfortable with things as they are.
2. The environment forces are relatively stable.
3. Stabilizing through consolidation – Consolidation is sought through stabilizing after a period of rapid expansion.
4. Less threatening – Expansion may be perceived as being threatening.