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Strategic Management - Concept Of Corporate Strategy

Levels of Strategy

   Posted On :  25.06.2018 09:49 pm
Levels of Strategy

A typical business firm should consider three types of strategies, which form a hierarchy as shown in Figure 1.1

Levels of Strategy
 
A typical business firm should consider three types of strategies, which form a hierarchy as shown in Figure 1.1

Corporate Strategy


This describes a company’s overall direction towards growth by managing business and product lines. These include stability, growth and retrenchment.
 
For example, Coco cola, Inc., has followed the growth strategy by acqui-sition. It has acquired local bottling units to emerge as the market leader.

Business Strategy


Usually occurs at business unit or product level emphasizing the improvement of competitive position of a firm’s products or services in an industry or market segment served by that business unit. Business strategy falls in the in the realm of corporate strategy.
 
For example, Apple Computers uses a differentiation competitive strat-egy that emphasizes innovative product with creative design.
 

Functional Strategy

 
 
It is the approach taken by a functional area to achieve corporate and business unit objectives and strategies by maximizing resource pro-ductivity. It is concerned with developing and nurturing a distinctive competence to provide the firm with a competitive advantage.
 

Operating Strategy

 
These are concerned with how the component parts of an organi-zation deliver effectively the corporate, business and functional -level strategies in terms of resources, processes and people. They are at de-partmental level and set periodic short-term targets for accomplishment.
 

Crafting A Strategy

 
Companies and strategists craft strategies in different ways. In extreme cases it is only the Chairman cum Managing Director who crafts the strategy. But in firms, which have participative management style of functioning, it is a group or team exercise involving key personnel and all functional executives in the organization.


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