Lesson 2 the strategy making hierarchy

In this lesson you learned that in diversified company’s, crafting a company’s fully-fledged strategy involves four distinct types of strategic actions and initiatives – i.e. Corporate Strategy, Business Strategy, Functional Unit Strategy and Operational Strategy.

1. Crafting and Executing Strategy: The managerial process Global Business Consultants & Partners Training Courses Copyright 2020 Global Business Consultants

2. Chapter 3 . Crafting a strategy to achieve the objectives Lesson 2: The Strategy Making hierarchy

3. “Corporate strategy is strategy ay the multi-business level concerning how to improve company performance or gain competitive advantage by managing a set of businesses simultaneously .” Tricker et al.

4. A company’s strategy making hierarchy . In diversified company, developing a fully-fledged strategy involves four distinct type of strategy actions and initiatives. Each of these involves different facets of the company’s overall strategy and requires the participation of different types of managers. The Strategy Making hierarchy

5. A company’s strategy making hierarchy . The pieces of a company’s strategy from top to bottom of the strategy hierarchy should be cohesive and mutually reinforcing fitting together like a puzzle. The first of the four types is a company’s Corporate Strategy is orchestrated by the CEO, MD or Business Owner and other managers and establishes an overall strategy for managing a set of businesses in a diversified, multi-business company. The Strategy Making hierarchy

6. Corporate strategy . A company’s Corporate Strategy, regardless of type and size, concerns how to boost the combined performance of the set of businesses (or business units) the company has diversified into. It also concerns the means of capturing cross-business synergies and turning them into competitive advantage. The Strategy Making hierarchy

7. Corporate strategy . A corporate strategy addresses questions such as: What businesses to hold; Which new markets to enter; and How to best enter new markets. Strategies concerns these questions involve: Acquisitions; Formation of strategic alliances; or Internal development. The Strategy Making hierarchy

8. Corporate strategy . A corporate strategy addresses questions such as: What businesses to hold; Which new markets to enter; and How to best enter new markets. Strategies concerns these questions involve: Acquisitions; Formation of strategic alliances; or Internal development. The Strategy Making hierarchy

9. Business strategy . Business Strategy is concerned with building competitive advantage in a single business unit of a diversified company or in a single business company. Business strategy is the responsibility of the CEO, MD or Business Owner. Business strategy also requires management and other influential key staff in developing the strategy. The Strategy Making hierarchy

10. Functional unit strategy . Functional Unit Strategy concerns the actions and approaches employed in managing particular functions within a business, such as R&D, production, finance, human resources, sales and customer service. For example, a company’s marketing strategy represents the managerial plan for running the sales and marketing part of the business. Lead responsibility for functional strategies within a company is normally delegated to the heads of the respective functions. The Strategy Making hierarchy

11. Operational strategy . Operational Strategies concerns the relatively narrow strategic initiatives and approaches for managing key operating units, such as plants, distribution centers, and purchasing centers. It also concerns strategic initiates within specific operating activities with strategic significance such as quality control, brand management, internet sales, and materials purchasing. Even though operating strategy is at the bottom of the strategy making hierarchy, its importance must not be downplayed. If a major plant fails to deliver production volume unit cost, and quality targets can damage the company’s reputation for quality products and undercut the achievement of the company’s profit objectives. The Strategy Making hierarchy

12. Congratulations! You’ve completed lesson 2. Recap: In this lesson you learned that in diversified company’s, crafting a company’s fully-fledged strategy involves four distinct types of strategic actions and initiatives – i.e. Corporate Strategy, Business Strategy, Functional Unit Strategy and Operational Strategy. Awesome work! Now click Complete and then Next for Lesson 3.