A typical business firm should consider three types of strategies, which form a hierarchy as shown in Figure 1.1
A typical business firm should consider three types of strategies, which
form a hierarchy as shown in Figure 1.1
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 StrategyUsually 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
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.
Tags : Strategic Management - Concept Of Corporate Strategy
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