In this lesson you learned that there are four levels of strategy-making which includes Corporate Level, Business Unit Level, Functional Unit Level and Operational Level. You also learned that developing strategy is a collaborative team effort in which every manager has a role for the area he or she is responsible for.

1. Strategy and
Strategic
Management: An
overview
Global Business Consultants &
Partners Training Courses
Copyright 2020 Global Business Consultants

2. Nice to
meet you.
Sam Lee Mohan
Founder and Team Member,
Global Business Consultants

3. Chapter 2. Levels of Strategy
Lesson 1: The 4 levels of strategy

4. Levels of
Strategy
 Corporate level (“Multiple Business”)
 Determines the overall scope of the organisation.
 Adds value to the different business units.
 Meets expectations of stakeholders.
 Business level (“Strategic Business Units”)
 Establishes how to compete successfully in
particular markets.
 Function level (“Business Functional Unit”)
 Sets out how different functions support the
business strategy.
 Operational
 Sets out how different parts of the organisation
deliver on its strategy.

5. Levels of
Strategy
 Corporate level (multiple business units)
 Corporate level strategy is developed by the
company CEO and other senior executive staff.
 At this level, the strategy establishes an overall
plan for managing a set of businesses.
 By set of business, we mean a diversified, multi-
business company.

6. Levels of
Strategy
 Corporate level (multiple business units) continued…
 Corporate level strategy is formulated on the basis
of boosting the combined performance of the set
of businesses, including:
 The means of capturing cross-business synergies
and turning them into competitive advantage.
 It addresses actions such as which businesses to
hold or which to divest.
 Which new markets to enter, and how best to enter
those markets.
 For example. By acquisition, strategic alliances,
or through internal skills and capability
development.

7. Levels of
Strategy
 Business level (strategic business units)
 Business level strategy is developed by the General
Management of each the company’s different lines of
business.
 At this level, strategy is developed with advice and input
from Senior Managers and the Heads of functional area
activities within each business.
 For single-business companies, the Corporate Level Strategy and
Business Level strategy merge into one Business Level strategy.
 Business level strategy is formulated on the basis of
building competitive advantage in a single business unit.

8. Levels of
Strategy
 Business level (strategic business units) continued…
 It is the responsibility of the CEO, MD or business owner
and direct report Managers.
 Business level strategy includes:
 The means of capturing cross-functional synergies and turning
them into competitive advantage.
 It addresses actions such as operational excellence, growth,
financial performance and talent and teamwork.
 Which new markets to enter, and how best to enter those
markets.
 For example. By acquisition, strategic alliances, or through
internal skills and capability development.

9. Levels of
Strategy
 Functional level (“A Specific Unit Within a Business”)
 Functional unit level strategy is developed by Heads or
Managers of each functional unit within a business.
 At this level, strategy is developed with advice and input
from key people.
 Key people include, staff and supervisors, stakeholders from other
functional areas and in small businesses, the business owner.
 Functional level strategy is formulated around the actions
and approaches employed in managing the specific
functions within the business.
 For example. R&D, production, sales and marketing,
customer service, and finance.

10. Levels of
Strategy
 Functional level (“A Specific Unit Within a Business”)
continued…
 A company’s functional unit strategy is essentially the
‘game plan’ for running that unit.
 A company’s marketing strategy represents the managerial
game plan for running the sales and marketing plan for the
business.
 The primary role of functional unit strategies is the
articulate the details of the Business Level Strategy:
 Company’s with more than one functional unit, will require more
senior management or the business owner to exert stronger
influence on the content of the functional unit strategies to
ensure alignment with the overall Business Level Strategy.

11. Levels of
Strategy
 Operational level (“A Specific Unit Within a Function”)
 Operational unit level strategy is developed by brand
managers, operating managers of plants, distribution
centers, purchasing centers, and the managers of
strategically important activities like website operations.
 At this level, strategy is developed with advice and input
from key people.
 Key people include, staff and supervisors, stakeholders from other
operational areas and in small businesses, the business owner.
 Operational level strategy is formulated around relatively
narrow strategic initiatives and approaches for managing
key operating units.
 For example. Plants, distribution centers, purchasing centers
and specific operating activities with strategic significance
such as quality control, materials purchasing, brand
management, internet sales.

12. Levels of
Strategy
 Operational level (“A Specific Unit Within a Function”)
continued…
 A distribution center manager of a company contracted to
provide timely delivery of goods must have a strategy to
ensure that finished products are rapidly turned around
and shipped out to customers once they are received from
the manufacturing facility.
 Even though Operational strategy is at the bottom of the
strategy-making hierarchy, its strategic importance is
crucial to the overall business strategy.
 For example. A company that fails in it strategy to achieve
production volume, unit cost, and quality targets can damage a
company’s reputation for quality products and undercut the
achievement of the company’s sales and profit objectives.

13. Congratulations! You’ve completed lesson 1.
Recap: In this lesson you learned that there are four levels of
strategy-making which includes Corporate Level, Business Unit
Level, Functional Unit Level and Operational Level. You also
learned that developing strategy is a collaborative team effort in
which every manager has a role for the area he or she is
responsible for.
Awesome work!
Now click Next for Lesson 2.