Tạ Thị Anh Thư MBAIU23037

ASSIGNMENT 5

CHAPTER 2

Question 1: How is strategic planning carried out at the corporate and

The corporate level is the highest, and therefore the most broad, level of strategy in business. Cor
porate-level strategy should define your organization’s main purpose. It should also direct all you
r downstream decision-making. For example, the objectives (e.g. high-level goals) in the levels b
elow this one should all have a direct line to the goals defined here.
Creating and understanding your corporate-level strategy is particularly important for organizatio
ns that have multiple lines of business. For example, if one arm of your business manufactures a
product and another arm sells that product, you’ll have a separate business unit strategy for each
—but one single corporate-level strategy that describes why those two arms are important, and h
ow those businesses interact for the good of the organization. There are a handful of things to do
as you work on your corporate-level strategy:
1. Confirm your overall mission and vision. These two elements define your entire organizatio
n, and so should be done at the corporate level: Your mission statement describes what your com
pany does and how it is different from other organizations in your competitive space.; Your visio
n statement describes the desired future state of your organization at a certain point in time. To cr
eate these elements, you may want to write out an OAS statement ( Objective, Advantage, Scop
e) or use a tool known as Strategic Shifts. You can read about both here.
2. Create your corporate objectives. Your objectives describe the high-level goals that will hel
p you achieve your mission and vision. Take, for example, a bank. This bank used the Balanced
Scorecard to outline objectives across four perspectives (from the top of the scorecard to the bott
om): financial, customer, internal, and learning and growth (L&G). You can see their objectives
written in the sample strategy map below.
Strategy Level 2: The Business Unit Level
Your business unit strategy is used for different areas of your business (like services and product
s, or multiple departments or divisions, for example). The complexity of this level will depend on
how many businesses you are in, and how your company is structured. It’s important to create a s
trategy for each business unit so that you can see which units are excelling and which need impro
vement.
Having a strategy at the business unit level allows you to weigh the costs and benefits of each bu
siness unit and to decide where you should spend your resources. Depending on the progress tow
ards your goals and your analysis of the market, you may even decide it’s time to divest or sell so
me of your business units so you can focus on the areas that are most important to achieving your
company’s corporate strategy. There are a few things to do as you work on your business unit str
ategies:
1. Differentiate yourself from your competitors. One of the best ways to tell if you’ve done thi
s adequately is through a SWOT analysis, which allows you to review your competitive environ
ment and define a strategy based on what sets your organization—and specifically, the business
unit—apart from the competition.
2. Create objectives and initiatives that support your business unit and the corporate level.
Your goal while creating a business unit strategy is to create objectives and initiatives that suppo
rt the unit while simultaneously contributing to the objectives and initiatives of the organization a
s a whole.
For example, at the corporate level for the learning and growth perspective, one of the bank’s ma
in priorities (in the example above) is to “provide valuable skills training.” With this objective in
mind, your business units will be able to determine what activities they’ll need to do to support t
his—like providing customer training services relevant to its specific function.
Strategy Level 3: The Functional Level
The functional level of your strategy involves each department—and what those at the departme
nt level are doing day-to-day to support corporate initiatives. Whereas your business unit strategy
would be defined and evaluated by senior leadership, your functional strategy is typically produc
ed by department heads (e.g. leaders in marketing, operations, finance, IT, etc.).
These individuals can help ensure that the departments execute the defined strategic elements, an
d that the components laid out at the functional level help support both the department level and
corporate level strategies. There are a few things to consider as you work on your functional strat
egies:
1. Understand that this level has the most detailed measures and projects. Measures help yo
u answer the question, “How are we doing toward meeting a particular objective?” Projects (or in
itiatives) help you answer, “What are the key actions we can take to support our objectives?” Wh
ile you’ll have measures and projects at every level of your strategy, they should be extremely de
tailed at the functional level. You can leverage a RACI matrix to ensure everyone knows who is r
esponsible for completing your projects and who they need to go to for help or direction.
2. Make sure the goals in your functional strategy align with the goals at the corporate level.
Corporate goals are set by the most senior members of your organization, and those goals drive
decision making. You’ll gain support from the top level of executives if your projects and goals a
lign with their goals. You’ll also be able to see how the work you are doing contributes to the ov
erall success of the company.
Going back to our bank example, this organization may decide that, at the functional level, meas
uring the number of service calls responded to and the response time for customer service calls ar
e the most effective measures for customer service training, which rolls up to support the skills tr
aining corporate-level initiative.
Feedback as You Create Your Strategies at Every Level
Providing support and feedback during strategy creation is critical, as it’ll help those involved to
fine-tune things and emphasizes the importance of the activity to the organization as a whole. An
d don’t forget to ask for feedback as well. For example, if customer service is a focus, talk to tho
se who are actually speaking to the customers and gather concerns and comments from them as
well.

Question 2: How is strategic planning carried out at the business unit level?
An ideal strategic planning process within a business unit is presented below. It consists of sever
al steps and is based on the business mission (derived from a wider company or corporate missio
n).

A successful business activity is built on the company's core competences. The SWOT analysis i
s a popular concept to conduct an overall evaluation of a company's strengths (S), weaknesses
(W) - the internal environment - and opportunities (O) and threats (T) - the external environment.
Based on contrasting the company's strengths and weaknesses with market opportunities and (pot
ential) threats,Goal and strategy formulation

Goals are set to define what is important to achieve. Within an organization there is a series of go
als of different kinds and on different levels. The goals that concern the most important company
relations, or the company as a whole, are strategic goals and they are usually developed over sev
eral years. Examples of (generic) goals: maximize sales revenue; maximize market share; maxim
ize market value of the company's products (in their segments); maximize brand loyalty. it gives
recommendations for actions in the resulting cells.

The next step is to form a strategy that will provide methods of achieving particular goals. A strat
egy is a framework for action; it channels all programmes and activities according to the defined
goals, often in the form of a plan. A well-developed strategy works as both a guide and an aid for
the distribution of resources, identification of needs, changes in the organization etc. At this level
you define the company's basic orientation and create guidelines for implementing what you wan
t to do. Another perspective is given by comparing your company with your most important
competitors. In principle, there are three basic strategies to follow: Cost leadership - 'being
cheaper than ...'; Differentiation - 'being different from ...'; Concentration/focus - 'being
narrower/more specialized than ...'.

Strategies only work if they are implemented appropriately. Practicable programmes must be the
refore formulated. If the strategy is to attain technological leadership for the development of spec
ific products, then programmes must be devised to strengthen research and development (R&D),
production, and processing units in the company. Similar requirements apply to marketing progra
mmes in which the effectiveness of its tools (product, price, place, promotion) needs to be evalua
ted and adjusted if necessary. Programmes can be related to several elements. One example is
provided by Peters and Waterman (former employees at McKinsey & Company) who
distinguished between a company's 'hardware' elements (the 'bones': strategy, (organizational)
structure, and (information and communication) systems), and 'software' elements (the 'blood':
(leadership) style, skills (competencies), staff, and shared values (culture)).

This final aspect emphasizes the need for constant evaluation of the company's strategic fit with
the market and further environmental dynamics.