Strategic Levels
Strategic management is performed at several levels encompassing an overall corporate strategy and individual business strategies. The following is a list of strategic levels found in a firm:
A Dynamic Strategy refers to a firm’s strategy, both business and corporate that embraces the necessity of ongoing strategic change and the seamless integration of strategy formulation and implementation.
A Corporate Strategy refers to the broader strategy that acts as an umbrella to an entire diversified firm.
A Business Strategy refers to the aggregate of organizational strategies in a diversified firm that refers to the way in which a company competes in its selected arenas.
A Strategic Business Unit (SBU) is a sub unit of the organization and is usually responsible for its own budgeting, new product decisions, marketing, hiring decisions and so forth. Each SBU is responsible for developing its business strategies that must be in tune with broader corporate strategies.
A Functional Strategy involves the level of operating divisions and departments such as financial, human resources, legal strategies, information systems, marketing, new product development, supply-chain, operations and research and development. Functional strategies are consistent and supportive of the business strategy, value chain and other functional areas. Each functional area attempts to collaborate in meeting higher level strategies and providing input into the business unit level and corporate level strategy.
A Management Strategy involves identifying and developing a composition of a firm’s best practices. Best Practices refers to a method, process, technique, activity, reward or incentive that is more effective at delivering a particular result. Through processes, checks, and testing a more refined outcome can be delivered with fewer problems and fewer risk complications.
An Operational Strategy is very narrow in focus and deals with day-to-day operational activities. This strategy is usually conceived under the controls of business level strategies that are directed by corporate level strategies and sometimes influenced by strategic business unit(s).