Strategic Management | 3 Levels of Strategy That a Large Organization Must Develop

List and discuss the three levels of strategy that a large organization must develop.

Answer: a. Corporate strategythis strategy seeks to determine what businesses a company should be in or wants to be in. Corporate strategy determines the direction that the organization is going and the roles that each business unit in the organization will plan in pursuing that direction. b. Business strategythis strategy seeks to determine how an organization should compete in each of its businesses. For a small organization in only one line of business or the large organization that has not diversified into different products or markets, the business strategy typically overlaps with the organization s corporate strategy. For organizations with multiple businesses, however, each division will have its own strategy that defines the products or services it will offer and the customers it wants to reach. c. Functional strategythis strategy seeks to determine how to support the business strategy. For organizations that have traditional functional departments

such as manufacturing, marketing, human resources, research and development, and finance, these strategies need to support the business strategy.

Strategy Basics for Business Owners

3 Levels of Strategy
There are three basic levels of business strategy:
Corporate Defining hat business the company is in Setting the overall structure! systems an" processes Deci"ing ho to compete $"entifying competitive a"vantage Selecting %ey success factors Coor"ination of company "epartments or areas to support achievement of business strategy an" ob,ectives-

#usiness Level &unctional

'mar%eting! finance ()! operations! )*D+

Describe the Three Levels of Strategy for a Single. #usiness Company

by Bert Markgraf, Demand Media

A single-business company is both agile and vulnerable.

Related Articles
Ho to Describe the !hree "evels of Management Differences Bet een #ingle Business $ Business Diversification #trategies !he Advantages of #ingle Business #trategy Ho to Describe a Marketing #trategy %eneric Business-"evel #trategies !hree "evels of &thical #tandards in a Business 'rgani(ation !he three levels of strategy for a company are corporate, business and functional. )orporate strategy focuses on determining hich businesses the company should be in. Business strategy develops competitive advantages ithin a businesses segment. *unctional strategy operates at the level of marketing, operations and finance to ensure that each part of the company has strategies to support the business. *or single-business companies, corporate strategy consists of continuously evaluating the benefits of remaining in a single business versus becoming active in complementary industries.
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.i+age.com Corporate Strategy

#ingle-business companies have the advantage of focus and rapid response but are vulnerable to problems in their industry. !heir corporate strategy must demonstrate the advantages of remaining active in only one industry hile evaluating business opportunities in areas ith complementary activities. -ith a goal of optimi(ing company operations, profitability and gro th, the corporate strategy must compare the return of a continuing investment in the single business ith the ac/uisition or starting up of complementary businesses.

Business Strategy
!he business strategy of a single-business company is similar to that of a business unit of a diversified company e0cept that the business strategy must support corporate strategic initiatives aimed at the single business. !he business strategy sets goals for performance, evaluates the actions of competitors and specifies actions the company must take to maintain and improve its competitive advantages. !ypical strategies are to become a lo -price leader, to achieve differentiation in /uality or other desirable features or to focus on promotion. Related Reading: !hree "evels of &thical #tandards in a Business 'rgani(ation

Marketing Functional Strategy

1n companies that are marketing oriented, the marketing strategy on a functional level influences the other functions and their strategies. A typical marketing strategy is to determine customer needs in an area here the company has a natural competitive advantage. #uch advantages might be in location, facilities, reputation or staffing. 'nce the marketing strategy has identified the kind of product customers ant, it passes the information to operations to design and produce such a product at the re/uired cost. !he advertising department must develop a promotional strategy, sales must sell the product and customer service must support it. !he marketing strategy forms the basis for the strategies of these other departments.

Other Functional Strategies

!he non-marketing functional strategies must support the marketing strategy that, in turn, is a component of the overall business strategy. 1n a single-business company, those strategies are tightly focused on one industry, but they must also deliver data that allo s the corporate strategy to e0amine possible diversification. #ingle-business companies are usually either highly ranked in their single business or dominant in their niche. !he strategies at the functional level try to maintain such a position but also look for e0ternal danger signs. 1f events outside the company2s control lead to a deterioration of its position, strategic components from a functional level must signal to the corporate level that an implementation of alternative strategies is re/uired.

"The most important thing is to set goals. Training is a waste of time if you don't have goals." ~ Samantha Riley The Three Levels of Enterprise Strategy
4nterprise strategy can be formulate" an" implemente" at three "ifferent levels: 5- Corporate level 6- #usiness unit level 3- &unctional or "epartmental level 7t the corporate level! you are responsible for creating valuethrough your businesses- 8ou "o so by managing your portfolio of businesses! ensuring that your businesses are successful over the long term! "eveloping business units! an" sometimes ensuring that each business is compatible ith others in your portfolio-

Competitive Strategies: 2 Types Creating Customer Value: !uestions

Blue Ocean vs" #e$ Ocean Strategy

9ro"ucts an" services are "evelope" by business units- The role of the corporation is t business units! pro"ucts an" services so that each is competitive an" so that each con corporate purposes-

%ifferentiation Strategies Three Hierarchical Levels of Strategy/ Surprise To &in: ' Strategies Corporate Level Strategy

rate Strategy 0 1hat business shoul" you be in2 Loo%s at the ange of business opportunities

Corporate level strategy fun"amentally is concerne" ith selection of businesses in h company shoul" compete an" ith "evelopment an" coor"ination of that portfolio of bu

ess Strategy 0 #attle plans! tactics use" to fight the competition n"ustry that your company currently participates Competitive Strategies an" Competitive 1ar 3ames+

Corporate level strategy is concerne" ith: #each 0 "efining the issues that are corporate responsibilities- These might incl i"entifying the overall vision! mission! an" goals of the corporation! the type of bu corporation shoul" be involve"! an" the ay in hich businesses ill be integrate

ional Strategy 0 Operational metho"s an" value a""ing s that you choose for your business 'venture es! technology strategies! "iversification strategies! mar%eting es!"ifferentiation strategies! etc-+

manage"-

Competitive Contact 0 "efining here in your corporationcompetition is to be lo

)ac* &elch+s , Strategic !uestions

Corporate Level Strategy

strategy is concerned ith3

-anaging .ctivities an$ Business /nterrelationships 0 corporate strategy se "evelop synergies by sharing an" coor"inating staff an" other resources across b investing financial resources across business units! an" using business units to co other corporate business activities-

rise. i"e cross.business process management

-anagement 0ractices 0 corporations "eci"e ho business units are to be gov through "irect corporate intervention 'centralization+ or through autonomous gove '"ecentralization+-

etitive Contact

Business 1nit Level Strategy

ging 7ctivities an" #usiness $nterrelationships

gement 9ractices

7 strategic business unit may be any profit center that can be planne" in"epen"ently fr business units of your corporation- 7t the business unit level! the strategic issues are a practical coor"ination of operating units an" about "eveloping an" sustaining a compe a$vantage for the pro"ucts an" services that are pro"uce"-

(unctional Level Strategy Business Unit Level Strategy

s unit level, the strategy formulation and implementationdeals ith3

oning an" "ifferentiating the business an":or pro"ucts against

The functional level of your organization is the level of the operating "ivisions an" "epa strategic issues at the functional level are relate" to functional business processes an" &unctional level strategies in )*D! operations! manufacturing! mar%eting! finance! an" resources involve the "evelopment an" coor"ination of resources through hich busine strategies can be e;ecute" effectively an" efficiently-

ess.level cross.functional process management

pating changes in technology an" customer perceptions ",usting the strategy to accommo"ate them-

&unctional units of your organization are involve" in higher level strategies by provi"ing business unit level an" corporate level strategy! such as provi"ing information on custo or on resources an" capa2ilities on hich the higher level strategies can be base"- On level strategy or strategic intent is "evelope"! the functional units translate them into "i plans that each "epartment or "ivision must accomplish for the strategy to succee"-3

ncing the nature of competition through strategic actions s virtual integration an" through political actions

ng strategic partnerships an" co.innovating ith other ss units! partners! an" customers-