2. Levels Of Strategy

LEVELS OF STRATEG

The most important thing is to set goals. Training is a waste of time if you don't have goals."   – Samantha Riley

Levels of Strategy

Underlying Assumption



Managers have a universal goal of making their organizations bigger and more profitable

1. Introduction 



Enterprise strategy can be formulated and implemented at three different levels: - Corporate level. - Business unit level - Functional or departmental level At the corporate level, organization is responsible for creating value through its businesses. The company does so by managing portfolio of businesses, ensuring that the businesses are successful over the long term, developing business units & sometimes ensuring that each business is compatible with others in its portfolio.

1. Introduction 



The strategy may be about competing and surviving as a firm, one can argue that products, not corporations compete and products are developed by business units. The role of the corporation is to manage its business units and products so that each is competitive and each contributes to corporate purposes. While the corporation must manage its portfolio of businesses to grow and survive, the success of a diversified firm depends upon its ability to manage each of its product lines.

2. Levels of Strategy 

There are Three Hierarchical Levels of Strategy and they are as follows: - Corporate Strategy i.e. What business should you be in? Looks at the whole range of business opportunities. - Business Strategy i.e. Battle plans, tactics used to fight the competition in the industry that your company currently participates in - Functional Strategy i.e. Operational methods and value adding activities that company choose for its business.

Corporat e Level Strategy

A) Corporate Level Strategy 



Corporate level strategy fundamentally is concerned with selection of businesses in which company should compete & with development and coordination of that portfolio of businesses. Corporate level strategy is concerned with: - Reach i.e. defining the issues that are corporate responsibilities. These might include identifying the overall vision, mission, & goals of corporation, the type of business corporation should be involved, and the way in which businesses will be integrated and managed.

A) Corporate Level Strategy - Competitive Contact i.e. defining where in your corporation competition is to be localized. - Managing Activities & Business Interrelationship i.e. corporate strategy seeks to develop synergies by sharing and coordinating staff and other resources across business units, investing financial resources across business units, and using business units to compliment other corporate business activities. - Management Practices i.e. corporations decide how business units are to be governed: through direct corporate intervention (centralization) or through autonomous government (decentralization).

A) Corporate Level Strategy  Thus to sump up: - Corporate level strategy is concerned with: - Reach. - Enterprise – wide cross – business process management. - Competitive Contact. - Managing Activity & Business Interrelationship - Management Practices

Busines s Strateg

B) Business Strategy



A strategic business unit may be any profit center that can be planned independently from the other business units of your corporation. At the business unit level, the strategic issues are about both practical coordination of operating units and about developing and sustaining a competitive advantage for the products and services that are produced. At the business level, the strategy formulation phase deals with: - Positioning the business against rivals. - anticipating changes in demand & technologies and adjusting the strategy to accommodate them.

B) Business Strategy



- Influencing the nature of competition through strategic actions. Thus, to sum up: - At the business unit level, the strategy formulation & implementation deals with: - Positioning and differentiating the business and/or products against rivals. - Business level cross functional process mgmt. - Anticipating changes in technology, customer perception and adjusting strategy to accommodate them. - Influencing the nature of competition through strategic actions such as virtual integration and through political actions - Building strategic partnership & co – Innovating with other business units, partners, & customers

Function al Strategy

C) Functional Strategy 

The functional level of organization is the level of the operating divisions and departments. The strategic issues at the functional level are related to functional business processes and value chain. Functional level strategies in R&D, operations, manufacturing, marketing, finance, and human resources involve the development and coordination of resources through which business unit level strategies can be executed effectively and efficiently.

C) Functional Strategy 

Functional units of organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on customer feedback or on resources and capabilities on which the higher level strategies can be based. Once the higher level strategy or strategic intent is developed, the functional units translate them into discrete action plans that each department or division must accomplish for the strategy to succeed.