Levels of Strategies

Corporate Level Strategy:

Business Level Strategy:
Functional Level Strategy:
Operational Level Strategy:
1.Corporate Level Strategy: This level focuses on the overall direction and scope
of the entire organization. It involves decisions regarding which industries to
compete in, how to allocate resources among different businesses, and how to
achieve synergy among various business units. Corporate level strategies often
involve decisions such as diversification, mergers and acquisitions, and strategic
alliances.
2.Business Level Strategy: Business-level strategies are concerned with how a
company competes within a particular industry or market segment. These
strategies are more focused and specific than corporate level strategies and
typically involve decisions regarding how to position the company's products or
services relative to competitors, how to gain competitive advantage, and how to
satisfy customer needs. Common business level strategies include cost leadership,
differentiation, and focus/niche strategies.
3.Functional Level Strategy: At this level, strategies are developed for each
functional area within the organization, such as marketing, operations, finance,
human resources, and research and development. Functional level strategies are
aligned with business-level strategies and are aimed at supporting the overall
business objectives. They involve decisions regarding how to effectively utilize
resources and capabilities within each functional area to contribute to the
organization's competitive advantage.
4. Operational Level Strategy: This level is concerned with the day-to-day
operations of the organization. Operational strategies focus on improving efficiency,
productivity, and quality in specific processes or activities. They involve decisions
regarding resource allocation, production scheduling, inventory management, and
quality control. Operational level strategies are aimed at achieving short-term goals
and objectives that contribute to the organization's overall success.
Integration strategies
Integration strategies refer to the approaches that businesses use to combine
different parts of their operations. These strategies can involve merging with or
acquiring other businesses, as well as coordinating activities across different
functions or business units within the organization.
Integration strategies are used to achieve various goals, such as expanding market
share, increasing efficiency, gaining access to new technologies or markets, and
reducing competition.
Types of Integration Strategies
1.Horizontal Integration: Horizontal integration involves merging with or
acquiring companies that operate in the same industry or produce similar products
or services. By combining with competitors or companies in related industries, a
business can expand its market presence, achieve economies of scale, and reduce
competition. For example, a clothing retailer might acquire another clothing brand
to increase its market share and diversify its product offerings.
2.Vertical Integration: Vertical integration involves expanding control over
different stages of the supply chain, either by integrating backward (towards
suppliers) or forward (towards customers). Backward integration involves
acquiring suppliers or raw material producers, while forward integration involves
acquiring distributors or retailers. Vertical integration can help businesses reduce
costs, improve coordination, and secure a stable supply of inputs or distribution
channels. For example, a food manufacturer might acquire farms or food
distributors to gain control over its supply chain.
Intensive strategies
Intensive strategies are a set of tactics used by businesses to grow and expand
within their existing market or industry. These strategies are often employed when a
company seeks to increase its market share, boost sales, or penetrate new market
segments.
Intensive strategies typically focus on maximizing the potential of the current
products or services offered by the company.
Types of Intensive strategies

Market Penetration Strategy: Market penetration involves increasing

market share within existing market segments. This strategy focuses on
selling more of the company's current products or services to its existing
customers or attracting new customers from competitors.
Tactics for market penetration may include aggressive pricing strategies,
promotional campaigns, expanding distribution channels, enhancing product
features or quality, or improving customer service.
The goal is to capture a larger share of the market and increase overall sales
volume.
Market Development Strategy: Market development involves expanding into new
market segments or geographic regions with the company's existing products or
services. This strategy seeks to identify and target new customer groups or untapped
markets to generate additional revenue streams.
Market development may involve entering new geographical areas, targeting
different demographic groups, or exploring new distribution channels.
Market development strategies aim to capitalize on growth opportunities outside the
company's current market boundaries.
Product Development Strategy: Product development involves introducing new
products or services to existing markets served by the company. This strategy
focuses on innovation and creating offerings that meet evolving customer needs or
preferences.
Product development may involve researching and developing entirely new
products, improving existing products, or diversifying the product line to offer a
broader range of options.
Companies may invest in research and development, collaborate with partners, or
acquire new technologies to support product development efforts. The goal is to
differentiate the company's offerings and maintain competitiveness in the market.
Porter’s Generic Strategies

Cost Leadership: In cost leadership, the company aims to become the lowest-cost
producer in the industry. This strategy involves striving to minimize costs at every
stage of the value chain, including production, distribution, marketing, and customer
service.
By achieving lower costs than competitors, the company can offer products or
services at lower prices, which can attract price-sensitive customers and capture
market share.
Cost leadership requires efficient operations, economies of scale, tight cost controls,
and investments in technology and process improvements.
Differentiation: Differentiation strategy focuses on offering unique products or
services that are perceived as superior in some aspect by customers. Differentiation
can be achieved through product design, features, quality, brand image, customer
service, or other factors that set the company apart from competitors.

By providing something distinct and valuable, the company can command higher
prices and build customer loyalty, reducing the sensitivity to price competition.

Differentiation requires innovation, creativity, and a deep understanding of customer

preferences and needs.
Cost Focus (or Focus on Cost): Cost focus strategy involves targeting a narrow
market segment or niche and striving to become the lowest-cost producer within
that segment. Instead of competing across the entire industry, the company focuses
its efforts on serving a specific group of customers who are particularly price-
sensitive.

By concentrating resources on a limited market, the company can achieve

economies of scale or specialization that enable cost advantages.

Cost focus requires a thorough understanding of the needs and preferences of the
target market and efficient operations tailored to serve that market segment.
Strategic Choice
Strategic choice refers to the process by which organizations identify, evaluate, and
select the most appropriate strategies to achieve their objectives and respond to
internal and external challenges and opportunities.
It involves making decisions about where to allocate resources, how to position the
organization within its industry or market, and which courses of action to pursue to
create and sustain competitive advantage.
Politics of Strategy choice
The politics of strategy choice refers to the complex dynamics and influences that
shape decision-making processes within organizations when selecting strategic
approaches. These influences can include power struggles, competing interests,
organizational culture, personal agendas, and external pressures.
Factors Influencing Politics of
Strategy choice
1.Power Dynamics: Decision-making in organizations is often influenced by
power dynamics among individuals or groups with varying levels of
authority, expertise, and influence. Powerful stakeholders may seek to
promote strategies that align with their interests or agendas, potentially
leading to conflicts or resistance from other stakeholders.
2.Organizational Culture: Organizational culture plays a significant role in
shaping strategic choices. Cultural norms, values, and beliefs can influence
how decisions are made, which strategies are prioritized, and how they are
implemented. Organizations with hierarchical cultures may favor top-down
decision-making, while those with more participative cultures may
emphasize consensus-building and collaboration.
3. Resource Allocation: The allocation of resources, such as funding, talent,
and time, can be a contentious issue in strategy choice. Different stakeholders
may vie for resources to support their preferred strategies, leading to
negotiations, trade-offs, and compromises. Resource constraints may also
limit the feasibility of certain strategic options.
4.External Pressures: External factors, such as market competition,
regulatory requirements, technological changes, and stakeholder expectations,
can exert pressure on organizations to adopt specific strategies. For example,
companies facing intense competition may be compelled to pursue aggressive
growth strategies to maintain market share, while regulatory changes may
necessitate strategic shifts to ensure compliance.
5. Risk Tolerance: The organization's risk appetite and tolerance influence
its willingness to pursue certain strategies. Risk-averse organizations may
prefer conservative strategies focused on stability and incremental growth,
while risk-taking organizations may be more inclined to pursue bold,
disruptive strategies with higher potential rewards but also greater risks.
1.Group Dynamics and Decision-Making Processes: Group dynamics and
decision-making processes within organizations can affect strategy choice. Factors
such as groupthink, cognitive biases, information asymmetry, and communication
breakdowns can impede the objective evaluation of strategic options and lead to
suboptimal decisions.
2.Leadership Style and Influence: The leadership style of key decision-makers,
such as CEOs and top management teams, can significantly influence strategy
choice. Charismatic leaders may sway decision-making in favor of their vision,
while transformational leaders may inspire support for innovative strategies that
align with organizational goals.
3.Short-Term vs. Long-Term Considerations: Balancing short-term imperatives,
such as quarterly financial targets, with long-term strategic objectives can be
challenging. Short-term pressures may lead organizations to prioritize strategies
that deliver immediate results at the expense of longer-term sustainability and
competitiveness.
Issues in Strategy implementation
Lack of Clear Communication:
Resistance to Change:
Inadequate Resources:
Lack of Leadership Commitment
Poor Strategic Planning and Execution
Organizational Culture and Resistance:
External Factors and Uncertainty
Advantages and Disadvantages of International operations

Advantages Disadvantages
Access to New Markets Political and Regulatory Risks
Revenue Growth Cultural and Language Barriers
Economies of Scale Logistical Challenges
Diversification of Risk Currency Exchange Rate Risk
Access to Resources Market Entry Costs