Understanding The Levels of Strategies In Planning Process


A strategy is essential to the success of every business. Having a great product or service is the first step, but having a great strategy on how to get your service or product to your target audience is crucial to how well you perform in the market.


A lot of businesses that failed, did not fail primarily because of the quality of their product or service but based on their strategy, and a lot of businesses succeeding today owe it to the strategies deployed.


Furthermore, your strategy will determine if you will be knocked out of the way by your competitors, or if your brand will outlive others. Every business owner must engage in strategic thinking, if they wish to take their organisation to the top, and become top of mind in their industry, it will depend highly on their strategy.


Your strategies are the general methods you intend to deploy to actualize your vision. No matter what the level, a strategy answers the question of “how” in every vision statement.


Your strategy involves both long-term planning as to the general course of the business, as well as your daily operations, and how they are designed in order to achieve success.


The three basic levels of strategies are; corporate strategy, business strategy and functional strategy.


Corporate Strategy


This is at the top of the entire pile, it basically outlines a company’s overriding strategy that oversees everything else that they do. It covers what business you are going to engage in, and how you plan to enter and win in the market. Meaning you define the business vision, the market you want to play in and how you plan to go about it at this level.


Therefore, in corporate strategy, firms must look at how the various business they own fit together, how they impact each other, and how the parent company is structured in order to optimize human capital, processes, and governance.


The major components in corporate strategy are; allocation of resources, organizational design, portfolio management and strategic trade offs.


Business Strategy


Business strategy is concerned with the strategic decision making for an individual business, or more specific aspect of the business. For larger corporations, at this stage, your strategy addresses the various units. It’s important to create a strategy for each business unit so that you can see which units are excelling and which need improvement.


Examples of business strategy are; most innovative product or service, product differentiation, pricing strategies, improve customer service, grow sales from new products, technology advantage, sustainability etc.


Functional Strategy


This is where your corporate and business strategy finally hits the road. It is basically the daily execution of your strategies. This stage is where all your other strategies are tested if they can lead you toward the organisation’s vision or not. No matter how beautiful your vision is, without a complementary functional strategy, they will remain mere strategy with no impact in your organisation.


A functional strategy is at the bottom-level of strategy, where you think about the various departments and units within your business, and how they work together to reach your goals. Your functional strategy will eventually determine to a large extent the success of your organisation.


Note that there must be the possibility of executing your corporate or business strategy via your functional strategy.


On the whole, strategy determines if your business will rise above competitors to become successful. Thus, your corporate strategy defines the business you want to operate in and your overriding objective, while your business strategy emphasise on the competitive positioning of specific units, products or services in your organisation. And your functional strategy defines your everyday actions, that bring to reality your corporate and business strategy.



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