Levels of Strategy
Strategic plans involve three levels in terms of scope:
1. Corporate-level (Portfolio)
At the highest level, corporate strategy involves high-level strategic decisions that
will help a company sustain a competitive advantage and remain profitable in the
foreseeable future.
Dri na musulod ang mga high level decision making. All the critical
decisions that a business man must do.
An example of a corporate-level strategy would be a leadership meeting
planning out 5-year goals. The 5-year goals can include how many sales
they wish to accomplish by then or how many employees they desire to
get to.
o Acquisitions to enter a new sector
o increase market share
2. Business-level
At the median level of strategy are business-level decisions. The business-level
strategy focuses on market position to help the company gain a competitive
advantage in its own industry or other industries.
Broaden exposure. Increase marketing budget. Improve quality of your
product or management.
Examples of business-level strategies
Cost leadership strategy: Cost leadership strategy forces a business to look
at the costs that are related to the manufacturing process, shipping and
delivery of a product to a customer that will affect the price point at which
they can sell their product to still return a profit.
3. Functional-level
At the lowest level are functional-level decisions. They focus on activities within and
between different functions, aimed at improving the efficiency of the overall
business. These strategies are focused on particular functions and groups.
Production strategy- Assemble to order- where companies produce
products on a customer-order basis, storing their inventory as assemblyready components.
A PC-maker that receives orders and then assembles customizable
computers using components like keyboards, monitors, and
motherboards is using an assemble-to-order strategy.
Types of corporate strategies
Growth
A growth strategy is a plan or goal for the company to create considerable growth
in different areas.
-overall growth
- Sales
- Revenue
- Entering Diversification or concentration- Diversification is when a company
enters new markets to expand its business.
Concentration refers to a company developing the core of its business, such as a
bookstore investing in selling more books.
Stability
Stability strategies refer to a company staying within its current industry or market
because it's already succeeding in its current situation. This strategy maintains the
company's success by continuing practices that work for the company.
To do this, the company might invest in areas in which they're doing well,
such as customer satisfaction.
For example, the marketing team might create advertisements with
coupons on them to send to customers to further improve customer
appraisal.
Retrenchment
The retrenchment strategy encourages the company to change paths to improve
the business. This might mean switching business models or changing markets.
Knni sya ang goal niya is to reduce or manage parts sa business na dli na
bitaw sya mapuslan sa companya. Ma achieve nila ni thru switching its
business pathway or removing parts of the business.
For example: The retrenchment program is part of Coca-Cola's larger
'Beverages for Life' restructuring strategy and includes plans to cut the
number of operating units from 17 to only nine across four regions to
reallocate resources to only the most popular products.
Reinvention
Reinvention strategies are when a company reinvents, or redesigns, an aspect of
the business that may be old or irrelevant.
Netflix, for example, started as a DVD rental and sales business, allowing
customers to rent unlimited DVDs and have them delivered by mail for a
monthly fee. The company transitioned to online streaming about 10
years later and became the most popular service of its kind