Strategic Level

strategic levelThe strategy has become the vital nucleus in the management and administration of any company, organization and institution.Depending on the size of the company as well as the number of different products or services that are offered to the market (businesses), it is necessary to define and undertake the strategy based on 3 clearly differentiated strategic levels or hierarchies:

Each of these 3 strategic levels are linked to the different levels of responsibility within the company, so the corporate strategy is the responsibility of the top management, the business strategy and functional by the middle managers. In the case of small and / or medium enterprises it is possible that the 3 strategic levels are the responsibility of a single person.

The superior strategies are linked to the lower level strategies, being necessary that they be coherent between both as well as maintaining an interaction and permanent coordination.

Corporate or Global Strategy

The corporate strategy has the objective of choosing the businesses and markets in which the company should participate as well as the best combination of these, answering the question: in which businesses do we have to participate?

This strategic level is essential for those companies that have more than one clearly differentiated business line or for those that want to develop new lines of business.

The corporate strategy identifies market opportunities that are prone to generate new business, the threats and weaknesses that can make close or sell existing businesses, as well as the search for synergies between the different businesses that integrate the company.

The corporate strategy is the responsibility of the top management of the company, being of maximum importance the decisions made at this strategic level due affecting the entire organization, it development and the future of the company.

For example, a company that is dedicated to the manufacture of buses has detected a new business opportunity in the maintenance of its products in cities where there are large fleets.In this case, the top management, through the corresponding analyzes, has decided through the corporate strategy to open a new Maintenance business.

Business or Competitive Strategy

The business or competitive strategy aims to define the best way to compete in our business looking for competitive advantages over the rest of the rival companies in the sector, requiring a competitive analysis of the sector.

In companies with multiple businesses it is necessary to create Strategic Business Units (SBU), each SBU can represent a single business or a set of closely related businesses.In each SBU the business strategy that allows the best way to compete in its sector is determined, being the case of corporations that have different strategies based on the SBU being autonomous strategies but linked to the corporate or global strategy.

Taking the previous example as a reference, the new strategic business unit called Maintenance has opted after carrying out the different analyzes to implement a competitive strategy based on service and differentiation to its customers, reducing to the maximum the delays in the repairs of the fleet as well as provide spare buses to their customers while performing repair and / or maintenance operations.

Functional Strategy

The functional strategy aims to optimize the functional departments of any company based on the business or competitive strategy of the higher level.

In any company we can find various functional departments such as operations (production, logistics, purchasing ...), marketing, human resources, finance, R&D ... the functional strategy determines how to use and develop all the resources, skills and know-how available in each department.

Taking as reference the previous example, the human resources department has adopted the functional strategy of searching and selecting both internal and external technical personnel and with a clear focus on the client and their satisfaction, who work in the maintenance centers located in the different cities where they operate.

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Strategic level

Strategic Plan

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Competitive strategy

Blue ocean strategy

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PEST analysis

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BCG Matrix

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Competitive advantage example

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