This document discusses different levels of strategy within an organization. It defines key terms like industry, value chain, company, and market. It then explains Rumelt's typology of diversification which categorizes companies based on their revenue sources. The document outlines some common levels of strategy as corporate, business, functional, and operational. It provides examples of each level and how the levels support each other. Finally, it includes organization charts to illustrate how strategies are implemented within single product, related product, and unrelated product businesses.

1. Levels of Strategy
PRESENTED BY:
HEMANT KUMAR
MBA 3rd sem

2. Terms
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Arrange the following terms in a logical hierarchy:
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Company
Division
Strategic Business Unit (SBU)
Corporation
Industry
Value Chain
Person
Department
Market

3. Terms

Arrange the following terms in a logical hierarchy:
Industry
 Value Chain
 Company
 Department
 Person

Corporation
 Division / SBU
 Company
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A market refers to the place where
goods and services are exchanged.

4. Rumelt's Typology of Diversification
1. Single Product: 95% of revenues from a single product line
2. Dominant Product: 70-94% of revenue from a single
product line
3. Related Product: Less than 70% of revenue from a single
product line and and the remainder of revenues from a
related product domain
4. Unrelated Product: Less than 70% of revenue from a single
product and remainder of revenues from an unrelated
product domain

5. Some Levels of Strategy
The Impact of IT on strategy is dramatically
different depending on the level of strategy. On
what level is your paper?
 Corporate
 Business
 Functional
 Operational

6. Corporate Level Strategy
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What businesses are we in? What businesses
should we be in?
Four areas of focus
Diversification management (acquisitions and
divestitures)
 Synergy between units
 Investment priorities
 Business level strategy approval (but not crafting)
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7. Corporate-Level Strategies
Valuable
strengths
Firm
Status
Concentric Diversification
(Economies
Corporate
of Scope)
growth
strategies
Conglomerate
Diversification
(Risk Mgt.)
Critical
weaknesses
Abundant
environmental
opportunities
Corporate
stability
strategies
Corporate
retrenchment
strategies
Can still go for business-level
growth (economies of scale)
Environmental Status
Critical
environmental
threats

8. The BCG “Portfolio” Matrix
Market Share
High
Stars
High
Anticipated
Growth
Cash Cows
Rate
Low
Low
Question Marks
?
Dogs
? ? ?

9. Business Level Strategy
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How do we support the corporate strategy?
How do we compete in a specific business arena?
Three types of business level strategies:
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Low cost producer
Differentiator
Focus
Four areas of focus
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Generate sustainable competitive advantages
Develop and nurture (potentially) valuable capabilities
Respond to environmental changes
Approval of functional level strategies

10. Functional / Operational Level Strategy
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Functional: How do we
support the business
level strategy?
Operational: How do
we support the
functional level
strategy?
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An example.
Business L.S.: Become
the low cost producer of
widgets
Functional L.S. (Mfg.):
Reduce manufacturing
costs by 10%
Operational (Plant #1):
Increase worker
productivity by 15%

11. A Simple Organization Chart
(Single Product Business)
Business
Level
Strategy
Research and
Manufacturing
Development
Functional
Level
Strategy
Business
Marketing
Human
Resources
Finance

12. A Simple Organization Chart
(Dominant or Related Product Business)
Corporate
Level
Business
Level
Multibusiness
Corporation
Business 1
(Related)
Business 2
(Related)
Business 3
(Related)
Functional
Level
Research and
Manufacturing
Development
Marketing
Human
Resources
Finance

13. An example of an Unrelated Product Business
(Note: By itself, an SBU can be considered a related product
business)
SBU: a single
business or
collection of related
businesses that is
independent and
formulates its own
strategy
A
(Multi-business)
Corporation
Strategic
Business Unit 1
Company 1
Co. 2
Ex.: G.E. (General
Electric Corp.)
S.B.U.
2
Co. 3
Division 1
Div. 2
Div. 3

14. THANK U