Strategy variants

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Depending on the organization, we can distinguish the following variants of strategy:

Strategy at the level of corporation

It is shaped by the head managers, which oversees whole organization rather than one type of business. It deals with the activities undertaken by the organization as a whole, and seeks to define the role it plays and roles of particular business units.

The strategy at the level of the strategic business unit (SBU)

It is used to control of interests and activities of a single business unit. Strategic Business Unit SBU) groups all types of economic activities, designed to produce a specific type of product or service and treats them as a single unit.

Strategy at the functional level

It creates a framework for the management of such areas as: finance, research and development, marketing, ecology, etc. This strategy consists in determining how the function is to be implemented, to foster the desired competitive advantage, and on the coordination of the function with other functions in company.

Comparison of the basic types of business strategy

Aspect Corporate strategy SBU strategy Functional strategy
Scope
  • selection, in which areas of economic activity company should be positioned,
  • business development strategy
  • specify the target market,
  • breadth and depth of the product range,
  • product brand policy
  • product recall
Goals and tasks
  • aggregated business objectives (e.g.. development, profitability, earnings per share)
  • limited by objectives of the corporation,
  • aggregated around the products/markets (e.g. the increase in sales, profitability, cash flow)
  • limited by objectives of the corporation and SBU
  • aggregated around specific product/market (sales, market share, customer satisfaction)
Resource allocation
  • allocation between SBU areas of activity
  • allocation between the functional departments working for different areas of the business (for example research and development)
  • allocation between products/markets within the particular SBU
  • allocation between the functional departments within the SBU
  • the allocation between the instruments of the marketing mix for each product/market
Sources of competitive advantage
  • mainly thanks to financial and human resources, better organization and management, and synergistic effects
  • mainly thanks to the strategies of competition, better competences than competitors',
  • mainly thanks to an efficient product placement, superiority of marketing activities relative to competitors
The main areas of decision
  • design of the production system,
  • policy mix
  • development of the market,
  • distribution policy
  • price policy,
  • promotion,
  • managing stocks.


References

Author: Krzysztof Wozniak