Business strategy is the blueprint that defines how an organization will achieve its objectives. Every company, irrespective of the industry, needs a robust strategy to achieve its goals. In this Beginner’s Guide to Business Strategy, we will analyze business strategy levels with relevant examples.
A business strategy comprises several interconnected levels, all of which are necessary for the execution of a business plan. These levels include corporate strategy, business unit strategy, and operational strategy.
Corporate Strategy: Corporate strategy is the high-level strategy that drives the overall direction of the organization. In this case, the corporate strategy is decided by the top management and board of directors. Corporate strategy defines the objectives, vision, and mission of the organization, as well as key performance indicators (KPIs) and key success factors (KSFs). A good example of corporate strategy is Google’s mission, which is “to organize the world’s information and make it universally accessible and useful.” This mission statement guides all Google’s operations.
Business Unit Strategy: Business unit strategy is at the level of the company’s business units. It involves the strategy required to create competitive advantage for the unit’s products or services within the industry. This could include product differentiation, cost leadership, and market segmentation. An excellent example of business unit strategy is Apple’s iPod. Apple differentiated the product by designing it to be user-friendly and visually appealing. This unique selling point allowed the iPod to dominate the market.
Operational Strategy: Operational strategy is the strategy that focuses on specific activities or tasks that support the business unit strategy. At this level, strategy focuses on how to optimize processes, reduce costs, and enhance efficiency. An excellent example of operational strategy is Toyota’s production system. Toyota created a world-class production system that uses Lean manufacturing principles to optimize processes and reduce waste.
Conclusion: Business strategy levels are essential in the overall success of an organization. A robust strategy ensures that a business is competitive and achieves its objectives. Organizations can use these levels to create a comprehensive roadmap that guides them towards their goals. By understanding the different levels, companies can create a more effective strategy that will drive their success.
