Table of Contents
Task 1 of 3...................................................................................................................................................1
Task 2 of 3...................................................................................................................................................7
References...................................................................................................................................................9
Task 1 of 3
The concept of business strategy and levels of business strategy
In the complex world of business, the business strategy provides a clear direction that can help
the organization to thrive and survive in the future. Business strategy can therefore be defined as
the overall plan that a business entity has in place to guide its operations. It includes the strategic
choices that management makes on resource deployment, competition, and value generation for
its target customers. A well-defined strategy serves as the base for the steady growth, creation of
competitive advantages, and management of the market environment.
However, business strategy as a concept is not a singular construct. They exist in various tiers in
any organization whereby each tier possesses a specific function and domain. It is vital to
comprehend these levels because they are interconnected and function collaboratively to attain
the main objectives of the organization. undefined
1. Corporate Level Strategy: This is a long-term, generalized view of the organization and its
strategic course. Senior management develops this strategy with respect to factors such as
diversification and selection of industries for mergers and acquisitions. Key questions addressed
at this level include:
-In which industries should we compete?
- What strategies for creating shareholder value can be implemented in key business units with
available resources?
An example of corporate strategy is conglomerate Samsung’s decision to offer products in
several areas such as electronics and machinery. Such diversification enables them to manage
risks as well as make the most out of opportunities across the markets.
2. Business Level Strategy: This level is more detailed, being concerned with how a company
performs in a given sector or niche market. Here, leadership explains how to attain a competitive
position against other competitors in that specific market Decisions at this level involve:
-Identifying target customers and their needs.
-Choosing a competitive positioning strategy.
- Innovating products and services to create differentiated benefits for the target consumers.
For example, an organization such as Ryanair, which is a low-cost airline, may have a cost
leadership strategy where it mainly aims at offering low prices and efficient services to the target
clients.
3. Functional Level Strategy: This tactical level unravels the aforementioned strategies into
specific actionable procedures for departments in the organization. Marketing, finance, and
operations, for instance, implement functional strategies congruent with the business-level
strategy. Functional strategies typically address:
-Specific tactics to achieve departmental goals.
-Resource allocation within the department.
-Performance metrics to track progress.
The functional strategy of a marketing department of a high-end readymade garments brand
might be to focus on brand experiences and differentiation through niche social media marketing
for reaching the targeted luxury consumers.
Elements of a Strategic Framework and the Strategy Development Process
As the business environment continues to evolve, the organizations face problems that need to be
addressed to harness the available opportunities. This concept is captured in a strategic plan – an
all-encompassing document that maps out an organization’s goals and the ways of attaining
them. But having a clear structure is only the first step. A robust strategy development process,
the ongoing cycle of analysis, planning, and execution, transforms the framework into a living
document guiding the organization towards success.
The core elements of a strategic framework provide the foundation for effective strategy
development. These elements typically include:
Vision: An ideal statement that paints an accurate picture of what the organization wants to
achieve in the future. It helps to facilitate the direction of the activity, to act as an inducement for
employees and other stakeholders.
Mission: Abstract: A summary of the organization’s mission, vision, and beliefs. It provides and
outlines the mission and the very reason for the existence of the company or the organization.
Values: The policy structures and guidelines that retain as standards within the organization.
Values establish a strong ethical compass.
Objectives: Strategic goals that operationalize the vision while encompassing the features of
specificity, measurability, attainability, relevancy, and time-bound nature. (Lucco, 2024)
Strategy: A general map of strategies that shows how an organization will attain its goals and
objectives. It defines the competitive advantage and overall approach.
Tactics: The concrete activities and measures that reflect the strategy. Tactics are situated in
between strategy and execution.
These elements are usually intertwined and examined in the light of strategic tools such as the
SWOT analysis (Strengths, Weaknesses, Opportunities, Threats). SWOT analysis enables one to
evaluate organization internal capabilities and threats as well as the external opportunities and
threats in the environment. (ATLASSIAN, 2024)
The strategy development process, in turn, breathes life into the strategic framework. It's a
cyclical process with several key stages:
Situation Analysis: This stage includes an internal and external analysis of the organization.
Internally, the organization determines its opportunities and threats (SWOT). Externally, it
identifies the competitors, the trends in the marketplace, and possible strengths, weaknesses,
opportunities and threats (SWOT). (Lucco, 2024)
Goal Setting: Based on the situation analysis, the organization defines SMART objectives that
align with the overall vision.
Strategy Formulation: From the SWOT analysis and set goals, the organisation creates a strategy
that outlines how it will reach the goals. This may involve selecting a strategic position such as
cost advantage or differentiation.
Action Planning: Operationalizes the overarching strategy to include detailed, tangible steps with
well-defined roles, dates, and supports.
Implementation & Monitoring: The formulated plan is implemented. Performance is checked and
reviewed frequently to determine effectiveness and improve it where necessary.
Strategy development is a cyclical process. The organization should look at the framework and
align the strategy based on the monitoring and evaluation that is being done. This ensures the
strategic roadmap remains relevant and adaptable in a dynamic environment.
Types of Business Strategies
Business strategies are overall plans through which a firm intends to accomplish its long-term
objectives. Such plans contain choices of positioning the product, communicating with the
customer, and gaining an edge over competitors. undefined
Competitive Strategies: These strategies are geared towards sustainable competitive advantage in
the market. Michael Porter's Five Forces framework identifies two key dimensions for achieving
a competitive advantage: cost leadership and differentiation. A cost leadership strategy seeks to
produce goods or offer services that are cheaper than the counterparts of the competitor while
differentiation strategy emphasizes on a unique selling proposition. These dimensions can be
combined with target market focus (broad or narrow) to create four distinct strategies: Strategies
are: overall cost leadership, overall differentiation, focused differentiation, and focused low cost.
(Sharma, 2022)
Growth Strategies: Mainly concerned with market share, growth strategies can be either external
or internal. Internal growth concerns building out current activities, for example, introducing
new products or markets. External growth means acquiring or merging with other organisations.
Corporate-Level Strategies: These strategies determine the manner in which a company
addresses its overall business portfolio. The types of corporate level strategies are vertical
integration, horizontal integration, diversification and consolidation.
The best operational strategy for a company depends on the factors such as the industrial sector,
competitors, and organizational resources. Strategy should be dynamic and capable of
responding to changes that occur in the operation environment.
Elements of a Strategic Management Process
Strategic management is a continuous process of implementing organizational strategies for
achieving a common vision. It encompasses four key elements:
Strategic Analysis: It is a detailed evaluation of the external and internal factors of the
organization. SWOT analysis tools etc are effective in the internal assessment of the organization
and its strengths and liabilities. Industry tools such as PESTEL (Political, Economic, Social,
Technical, Environmental and Legal) tools consider industry and market forces that may affect
the company. (KENTON, 2023)
Strategy Formulation: Regarding this, the strategic management process involves the formulation
of a vision, mission, and good strategic aims for the company advised by the findings from the
strategic analysis phase. This covers identification of the company’s vision and strategic
objectives in the future forecasts.
Strategy Implementation: This stage operationalises strategy or in other words, turns strategy
into tangible actions. It entails resource deployment, creating operational strategies and
guaranteeing congruity across the whole establishment. It would be unrealistic to count on the
implementation’s success without efficient communication and leadership.
Strategy Evaluation and Control: It is also crucial to know the degree of success of the chosen
strategy and its impact on a business. KPIs are used in identifying advancement toward the
formulation of strategic goals. If necessary, revisions are required in the strategy for it to be on
par in the ever-evolving business structures, they are implemented.
Key Organizational Theories and Strategic Options
The business environment can be described as volatile and uncertain. Organisations require
resilient plans to sustain them over long terms that not only highlight the aim but also
accommodates some contingencies or shocks. This essay looks at how organization theories are
used to understand business strategy and how strategic options are vital to managing the
unknown.
Another key concept in the sphere of strategic management is Porter’s Five Forces. Also known
as the Competitive Forces Model, distilled by Michael Porter, it assesses the competitive
environment in the light of threat of new entrants, the bargaining power of the suppliers and the
buyers, threat of substitutes, and the intensity of rivalry. Using such forces, companies get to
adopt applicable competitive strategies that will enable them gain competitive edge within the
industry.
Porter’s Five Forces Framework is complemented by the Resource-Based View (RBV). This
theory suggests that competitive edge of a firm lies in its resource, capability and competence
that are valuable to it. Based on the RBV perspective, internal analysis is considered crucial to
strategy formulation. It is a strategic concept which helps organizations to identify their unique
strengths and align organizational resources and capabilities with competitive objectives.
It matters that the business environment is constantly evolving, which means that the strategy
must be too. It is here that the idea of strategic options comes into play. Strategic choices are
then prior planned action plans that an organization may take with a view of attaining its long-
term objectives. (MasterClass, 2022)
Contingency Theory provides additional back up to the idea of strategic options. According to
this theory there is no correct strategy for an organization it depends with the situation at hand. In
other words, the optimal contingency plan depends on the contingencies faced by the
organization. Strategic options make it possible for businesses to change their strategies in
response to the changing environment, thus enabling them to be relevant.
For instance, where enhanced competition pressure comes from low-cost producers, a firm is
likely to set up a strategic plan that consists of market expansion, product differentiation or cost
reduction strategies. Having these options fixed makes it easier for the company to respond once
threatened by competition.
Task 2 of 3
References
ATLASSIAN, 2024. How a strategic planning framework can help you achieve your big goals. [Online]
Available at: [Link]
[Accessed 14 July 2024].
KENTON, W., 2023. What Is Strategic Management?. [Online]
Available at: [Link]
[Accessed 15 July 2024].
Lucco, J., 2024. The ClearPoint Strategy Success Framework. [Online]
Available at: [Link]
[Accessed 14 July 2024].
MasterClass, 2022. What Are Strategic Options? 12 Examples of Strategic Options. [Online]
Available at: [Link]
[Accessed 15 July 2024].
Sharma, M., 2022. Strategic Management: The Types of Business Strategy. [Online]
Available at: [Link]
business-strategy-7b3302e9c517
[Accessed 15 July 2024].