Hierarchy of strategies

MBA Project

1. Hierarchy of Strategies Ideas for TODAY and TOMORROW

2. Topics Meaning of Strategy & Strategic Management Importance of Strategy Levels (Hierarchy) of Strategies Corporate Level Strategy Business Level Strategy Functional Level Strategy

3. Strategy & Strategic Management Strategy is a comprehensive master plan stating HOW the corporation will achieve its mission and objective. Strategic management  is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives.

4. Importance of Strategy Strategic Management seeks to co-ordinate & integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. The initial task in strategic management is typically the compilation & dissemination of the vision & the mission statement. This outlines, in essence, the purpose of an organization.

5. Importance of Strategy (continued…) Strategies are usually derived by the top executives of the company & presented to the Board of Directors in order to ensure they are in line with expectations of the stakeholders. The implications of the selected strategy are highly important. All strategic planning deals with atleast 1 of 3 questions : Where are we now..??? Where do we want to go..??? How do we get there..???

6. Levels (Hierarchy) of Strategies

7. Corporate Level Strategy A corporate level strategy involves all the strategic decisions that are taken by the top executives of the company that affects the whole organization or company . A Balance Scorecard approach Grand Strategies : a) Growth/Expansion Strategy (Internal & External) b) Stability (it is pause or no change strategy) c) Retrenchment (Regrouping through cost & asset reduction to reverse declining sales & profit) d) Combination Strategy (it is the strategy where more than 1 grand strategy is used)

8. Business Level Strategy Business level strategy is an integrated and co-ordinated set of commitments & actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets. The purpose of this strategy is : to create differences between position of a firm & its competitors firm must make a deliberate choice to : perform activities differently perform different activities

9. Business Level Strategy (continued…) Competitive Strategy Differentiation strategy (Approach under which a firm aims to develop & market unique products for different customer segments) Low cost strategy (It describes a way to establish the competitive advantage) Focus strategy (It is usually employed where the company knows its segment & has products to competitively satisfy its needs)

10. Functional Level Strategy The functional level of the organization is the level of operating divisions & departments . Functional level strategies in Marketing, Finance, Human Resources, Operations and Research & Development involve the development & co-ordination of resources through which business unit level strategies can be executed efficiently & effectively . Strategies for each functions in the organization are as follows :

11. Functional Level Strategy (continued…) Strategies at operational level are as follows : Quality Capacity Technology Product Facility Product service mix Functional Strategy – Operating Strategy Quality Product Technology

12. Functional Level Strategy (continued…) Strategies at financial level are as follows : Procurement of finance Utilization of finance Financial ratio analysis Financial strategy Functional Strategy – Financing Strategy

13. Functional Level Strategy (continued…) Strategies at marketing level are as follows : Market segment Product positioning Product Life Cycle (PLC) Pricing Distribution Promotion Functional Strategy – Marketing Strategy

14. Functional Level Strategy (continued…) Strategies at Human Resources level are as follows : Recruitment Selection Orientation Training & Development Career Planning Compensation Functional Strategy – Human Resources Strategy

15. Thank You…