Three Levels of Strategy: Corporate, Business and Functional

The word “strategy” is derived from the Greek word “stratçgos”; stratus (meaning army) and “ago” (meaning leading/moving).

Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. The strategy is also about making choices from the various alternatives that provide the organization with some measure of a sustainable competitive advantage.

The strategy is the long-term action plan formulated and implemented. In a competitive market, forms obtain aggressively challenge their competitors for improving their performance. In such a situation, strategy serves as a means for achieving sustainable competitive advantage. A strategy may include geographic expansion, diversification, execution and merger, product development, market penetration, retrenchment, divestiture, liquidation, and joint venture.

We’re going to discuss 3 strategy levels

  1. Corporate
  2. Business
  3. Functional
  1. Corporate:

The corporate level strategy provides long term direction & scope to the organization as a whole. It always involves strategic decisions. It is mainly concern with the overall purpose & scope of an organization & how value will be added to the different parts of the organization. the corporate strategy consists of strategic planning at the corporate level and does not limit to one particular department such as marketing, finance, purchase, etc.

the corporate-level strategy should include:

  • Resources allocation
  • Growth & stability
  • Diversification
  • Geographic expansion
  • Concentration

2.Business

The business-level strategy allows the corporate-level strategy. It is a concern with the strategic business unit. The large organization operates several businesses. It defines its business portfolio. It classifies its business into a strategic business unit(SBU). Such classification is generally based on the product category.

BLS seeks the answer to the question. How should we complete in each of our businesses? For a small organization or the large organization that has not diversified into different products or markets, the business level strategy overlaps with the organization’s corporate strategy. In multiple or diversified business organizations, each division will have its own strategy that defines the product or services it will offer, the consumers it wants to reach, and the like.

the business-level strategy should include:

  • Resources Allocation
  • Objectives
  • Positioning
  • Product Development
  • Market Development

3.Functional Level Strategy

It follows from a business-level strategy. It is concerned with how the component parts of an organization deliver effectively the corporate & business-level strategies in terms of resources, processes & people. It spells out specific tasks. It is concerned with a strategy for each function, such as production, marketing, finance, human resource, research & development. It always deals with the operations of the organization. It supports the business-level strategy.

Functional Level Strategy should include:

  • Resource allocation
  • Objective

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