Levels And Types Of Strategy

Organizations are complex entities. Every organization must address several

levels, types, or areas of strategic management. Moreover, for firm competing in
more than one business area or market, a strategy of integration and
interrelationships between these areas must be developed.

Various authors have described these areas, types, or levels of strategies

differently, but the essential issues can be addressed using three levels: a
corporate-level strategy, a business-unit strategy, and functional/operational
strategies.

Corporate strategy
Corporate strategy defines what business or businesses the firm is in or
should be in, how each business should be conducted, and how it relates to
society. This strategy is for the company and all of its business as a whole.
Corporate strategies are established at the highest levels in the
organization; they generally involve a long-range time horizon and focus on
the entire organization. At the corporate level the concern revolves around
the definition of business in which the corporation wishes to participate
and the acquisition and allocation of resources to these business units.
(Christensen, Andrew and Bower, 1987; Andrews, 1971).
Business strategy
Business strategy defines how each individual business will attempt to
achieve its mission within its chosen field of endeavour. This strategy
referred to each separate business unit (SBU) or strategic planning unit
(SPU). At this level strategy two critical issues are specified: (1) the scope or
boundaries of each business and the operational links with corporate
strategy, and (2) the basis on which the business unit will achieve and
maintain a competitive advantage within its industry (Wheelwright, 1984).
Functional strategy
Functional strategy focuses on supporting the corporate and business
strategies. This strategy is the a strategy for each specific functional unit
within a business. Functional strategies primarily are concerned with the
activities of the functional areas of a business (i.e., operations, finance,
marketing, personnel, etc.) will seaport the desired competitive business
level strategy and complement each other.
Some authors also distinguish: operating strategy and industry strategy. For
example, Thompson and Strickland explain that,

"operating strategy

refers to the even narrower and more detailed approaches and moves devised by
departmental-subunit managers and geographic-unit managers to achieve the
strategy-supporting performance objectives established in their areas of
responsibility"

At the industry (or government) policy level, the strategic concern revolve around
issues such as: incentives for investment, import and export trade barriers,duties
and quotes, the balance between imports and exports, inflation, health and safe
standards, employments, and so forth.