PGD - Corporate & Business Management
Lecturer - Dr. Samta Rai
Date – 14th - 15th Feb, 2011
Dr. S Rai
Dr. Samta Rai
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[Strategic planning process
Models are simplifications of complex situations, and traditional models of strategic
planning are no exception.
Nevertheless, without understanding the fundamental steps in the process,
it is difficult to critique them (i.e. identify their weaknesses and
propose improvements). A basic model of the strategic planning process would
include the stages depicted in the figure below.
Nevertheless, without understanding the fundamental steps in the process,
it is difficult to critique them (i.e. identify their weaknesses and
propose improvements). A basic model of the strategic planning process would
include the stages depicted in Figure 2.1 below -
Stages in the strategic planning
process
Dr. Samta Rai
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LEVELS OF STRATEGY
There are three levels of strategy which we can consider:
•Corporate strategy,
•Business strategy and
•Operational strategy.
Dr. Samta Rai
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LEVELS OF STRATEGY
Corporate Strategy
( Business you should be in)
Business Strategy
( Tactics to beat the competition)
Operational / Functional Strategy
( Operational methods to implement the tactics)
Dr. Samta Rai
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Corporate Level Strategy
Corporate level strategy fundamentally is concerned with selection of businesses in
which your company should compete and with development and coordination of that
portfolio of businesses.
Corporate level strategy is concerned with:
Reach – defining the issues that are corporate responsibilities. These might include
identifying the overall vision, mission, and goals of the corporation, the type of business
your corporation should be involved, and the way in which businesses will be integrated
and managed.
Competitive Contact – defining where in your corporation competition is to be localized.
Managing Activities and Business Interrelationships – corporate strategy seeks to
develop synergies by sharing and coordinating staff and other resources across business
units, investing financial resources across business units, and using business units to
complement other corporate business activities.
Management Practices – corporations decide how business units are to be governed:
through direct corporate intervention (centralization) or through autonomous
government (decentralization).
Dr. Samta Rai
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Business Unit Level Strategy
A strategic business unit may be any profit center that can be planned independently
from the other business units of your corporation.
At the business unit level, the strategic issues are about both practical coordination of
operating units and about developing and sustaining a competitive advantage for the
products and services that are produced.
At the business unit level, the strategy formulation and implementation deals with:
•Pricing, Positioning and differentiating the business and/or products against rivals
Business-level cross-functional process management
•Anticipating changes in technology and customer perceptions and adjusting the
strategy to accommodate them.
•Influencing the nature of competition through strategic actions such as virtual
integration and through political actions
•Building strategic partnerships and co-innovating with other business units, partners,
and customers.
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Dr. Samta Rai
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Functional Level Strategy
The functional level of your organization is the level of the operating divisions and
departments. The strategic issues at the functional level are related to functional business
processes and value chain.
Functional level strategies in R&D, operations, manufacturing, marketing, finance, and
human resources involve the development and coordination of resources through which
business unit level strategies can be executed effectively and efficiently.
Functional units of your organization are involved in higher level strategies by providing
input into the business unit level and corporate level strategy, such as providing
information on customer feedback or on resources and capabilities on which the higher
level strategies can be based.
Once the higher level strategy or strategic intent is developed, the functional units
translate them into discrete action plans that each department or division must
accomplish for the strategy to succeed.3
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In other words, the functional or operational level is concerned with how the component
parts of an organisation deliver effectively the corporate and business level strategies in
terms of resources, processes and people.
Questions to ponder
•Differentiate the key aspects and the role of management, at each level
• Compare and contrast the “top down” perspective with the “bottom up”
perspective
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Strategic Management
Bowman and Asch defined strategic management as "the process of
making and implementing strategic decisions", and to be "about the
process of strategic change".
According to Johnson , Scholes & Whittington, strategic management
includes understanding the strategic position of an organisation,
strategic choices for the future and managing strategy in action.
Dr. S Rai
Dr. Samta Rai
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THANK YOU ALL
Dr. Samta Rai
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