Lesson 1 the 4 levels of strategy

In this lesson you learned that there are four levels of strategy-making which includes Corporate Level, Business Unit Level, Functional Unit Level and Operational Level. You also learned that developing strategy is a collaborative team effort in which every manager has a role for the area he or she is responsible for.

1. Strategy and Strategic Management: An overview Global Business Consultants & Partners Training Courses Copyright 2020 Global Business Consultants

2. Nice to meet you. Sam Lee Mohan Founder and Team Member , Global Business Consultants

3. Chapter 2 . Levels of Strategy Lesson 1: The 4 levels of strategy

4. Levels of Strategy Corporate level (“Multiple Business”) Determines the overall scope of the organisation. Adds value to the different business units. Meets expectations of stakeholders. Business level (“Strategic Business Units”) Establishes how to compete successfully in particular markets. Function level (“Business Functional Unit”) Sets out how different functions support the business strategy. Operational Sets out how different parts of the organisation deliver on its strategy.

5. Levels of Strategy Corporate level (multiple business units) Corporate level strategy is developed by the company CEO and other senior executive staff. At this level, the strategy establishes an overall plan for managing a set of businesses. By set of business, we mean a diversified, multi-business company.

6. Levels of Strategy Corporate level (multiple business units) continued… Corporate level strategy is formulated on the basis of boosting the combined performance of the set of businesses, including: The means of capturing cross-business synergies and turning them into competitive advantage. It addresses actions such as which businesses to hold or which to divest. Which new markets to enter, and how best to enter those markets. For example. By acquisition, strategic alliances, or through internal skills and capability development.

7. Levels of Strategy Business level (strategic business units) Business level strategy is developed by the General Management of each the company’s different lines of business. At this level, strategy is developed with advice and input from Senior Managers and the Heads of functional area activities within each business. For single-business companies, the Corporate Level Strategy and Business Level strategy merge into one Business Level strategy. Business level strategy is formulated on the basis of building competitive advantage in a single business unit.

8. Levels of Strategy Business level (strategic business units) continued… It is the responsibility of the CEO, MD or business owner and direct report Managers. Business level strategy includes: The means of capturing cross-functional synergies and turning them into competitive advantage. It addresses actions such as operational excellence, growth, financial performance and talent and teamwork. Which new markets to enter, and how best to enter those markets. For example. By acquisition, strategic alliances, or through internal skills and capability development.

9. Levels of Strategy Functional level (“A Specific Unit Within a Business”) Functional unit level strategy is developed by Heads or Managers of each functional unit within a business. At this level, strategy is developed with advice and input from key people. Key people include, staff and supervisors, stakeholders from other functional areas and in small businesses, the business owner. Functional level strategy is formulated around the actions and approaches employed in managing the specific functions within the business. For example. R&D, production, sales and marketing, customer service, and finance.

10. Levels of Strategy Functional level (“A Specific Unit Within a Business”) continued… A company’s functional unit strategy is essentially the ‘game plan’ for running that unit. A company’s marketing strategy represents the managerial game plan for running the sales and marketing plan for the business. The primary role of functional unit strategies is the articulate the details of the Business Level Strategy: Company’s with more than one functional unit, will require more senior management or the business owner to exert stronger influence on the content of the functional unit strategies to ensure alignment with the overall Business Level Strategy.

11. Levels of Strategy Operational level (“A Specific Unit Within a Function”) Operational unit level strategy is developed by brand managers, operating managers of plants, distribution centers, purchasing centers, and the managers of strategically important activities like website operations. At this level, strategy is developed with advice and input from key people. Key people include, staff and supervisors, stakeholders from other operational areas and in small businesses, the business owner. Operational level strategy is formulated around relatively narrow strategic initiatives and approaches for managing key operating units. For example. Plants, distribution centers, purchasing centers and specific operating activities with strategic significance such as quality control, materials purchasing, brand management, internet sales.

12. Levels of Strategy Operational level (“A Specific Unit Within a Function”) continued… A distribution center manager of a company contracted to provide timely delivery of goods must have a strategy to ensure that finished products are rapidly turned around and shipped out to customers once they are received from the manufacturing facility. Even though Operational strategy is at the bottom of the strategy-making hierarchy, its strategic importance is crucial to the overall business strategy. For example. A company that fails in it strategy to achieve production volume, unit cost, and quality targets can damage a company’s reputation for quality products and undercut the achievement of the company’s sales and profit objectives.

13. Congratulations! You’ve completed lesson 1. Recap: In this lesson you learned that there are four levels of strategy-making which includes Corporate Level, Business Unit Level, Functional Unit Level and Operational Level. You also learned that developing strategy is a collaborative team effort in which every manager has a role for the area he or she is responsible for. Awesome work! Now click Next for Lesson 2.