TYPES OF STRATEGIES

Corporate-Level Strategy
Definition: Corporate-Level Strategy refers to the top management’s approach or game
plan for administering and directing the entire concern. These are based on the
company’s business environment and internal capabilities. It also called as Grand
Strategy.
Salient Features of Corporate Level Strategy
 Corporate Level Strategies is developed by the company’s highest level of
management considering the company’s overall growth and opportunities in future.
 It describes the orientation and direction of the enterprise in the long run and the
overall boundaries which acts as the basis for formulating the company’s middle and
low-level strategies, i.e. business strategies and functional strategies.
 While formulating corporate-level strategies, the company’s available resources
and environmental factors are kept in mind.
 It is concerned with the decisions regarding the two-way flow of company’s
information and resources between the various levels of management.
2. Business Level Strategy: The business-level manager, is the head of the division.
The strategic role of these managers is to translate the general statements of direction
and intent that come from the corporate level into concrete strategies for individual
businesses.
Characteristic of Strategic Management Decisions at Business Level
1. Bridging corporate and functional level decisions are those made at the business
level.
2. Business level decisions are less costly, risky, and potentially profitable than
corporate level decisions, but they are more costly, risky, and potentially profitable than
functional level decisions.
3. Business level decisions involve plant location, marketing segmentation and
geographic coverage and distribution channels.
3. Functional Level Strategy: Functional-level managers are responsible for the
specific business functions (Accounts, Sales, etc.) that form a company or one of its
divisions.
Characteristic of Strategic Management Decisions at Functional Level
1. Functional level decisions principally involve action–oriented operational issues.
2. These decisions are made periodically.
3. Functional level decisions are relatively short range and involve low risk and modest
costs
4. Functional level decisions are usually quantifiable
Crafting Successful Business Strategies
1. Always put top priority on crafting and executing strategic moves that enhance a
firm’s competitive position for the long-term and that serve to establish it as an industry
leader.
2. Understand that a clear, consistent competitive strategy, when well-crafted and well-
executed, builds reputation and recognizable industry position whereas a strategy
aimed solely at capturing momentary market opportunities yields fleeting benefits.
3. Endeavor not to get “stuck back in the pack” with no coherent long-term strategy or
distinctive competitive position, and little prospect of climbing into the ranks of the
industry leaders.
4. Invest in creating a sustainable competitive advantage, for it is a most dependable
contributor to above-average profitability.
5. Play aggressive offense to build competitive advantage and aggressive defense to
protect it.
6. Avoid strategies capable of succeeding only in the best of circumstances.
7. Avoid rigidly prescribed or inflexible strategies -- changing market conditions may
render it quickly obsolete.
8. Don’t underestimate the reactions and the commitment of rival firms.
9. Be wary of attacking strong, resourceful rivals without first having solid competitive
advantage and ample financial strength.
10. Consider that attacking competitive weakness is usually more profitable than
attacking competitive strength.
11. Be judicious in cutting prices without an established cost advantage.
12. Beware that aggressive strategic moves to wrest crucial market share away from
rivals often provoke aggressive retaliation in the form of a marketing “arms race” and/or
price wars.
13. Employ bold strategic moves in pursuing differentiation strategies so as to open up
very meaningful gaps in quality or service or advertising or other product attributes.
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1. Place top priority on crafting and executing strategic moves that enhance the
company's competitive position for the long run.
2. Be prompt in adapting to changing market conditions, unrealized customer needs,
buyer needs, buyer wishes for something better, emerging technological alternatives
and new competitor initiatives.
3. Invest in creating a sustainable competitive advantage.
4. Avoid strategies capable of succeeding only in the most optimistic circumstances
5. Bear in mind that attacking competitive weakness is usually more profitable and less
risky than attacking competitive strengths.
6. Strife to open up meaningful gaps in quality, performance or service features when
pursuing a differentiation strategy.
7. Bewary of cutting prices without an established cost advantage.
8. Do not underestimate the reactions and commitments of rival firms.
9. Avoid stuck-in-the-middle strategies that represent comprise between lower costs
and greater differentiation and between broader & narrow market appeal.
10. Be judicious in employing aggressive moves to arrest market share away from rivals
as this may lead to price wars.
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CRAFTING A STRATEGY FOR COMPETITIVE ADVANTAGE:
There Are Basically Four Approaches to Crafting a Strategy
1. The Chief Architect approach A single person – the owner or CEO –assumes the
role of chief strategist and chief entrepreneur, single handedly shaping most or all of the
major pieces of strategy. This does not mean that one person is the originator of all the
ideas underlying the resulting strategy or does all the background data gathering and
analysis: there may be much brainstorming with subordinates and considerable analysis
by specific departments. The chief architect approach to strategy formation is
characteristic of companies that have been founded by the company’s present CEO.
Michael Dell at Dell Computer, Steve Case at America Online, Bill Gates at Microsoft,
and Howard Schultz at Starbucks are prominent examples of corporate CEOs who exert
a heavy hand in shaping their company’s strategy.
2. The Delegation Approach: Here the manager in charge delegates big chunks of the
strategy-making task to trusted subordinates, down-the-line managers in charge of key
business units and departments, a high-level task force of knowledgeable and talented
people from many parts of the company, self-directed work teams with authority over a
particular process or function, or, more rarely, a team of consultants brought in
specifically to help develop new strategic initiatives.
3. The Collaborative or Team Approach: This is a middle approach when by a
manager with strategy-making responsibility enlists the assistance and advice of key
peers and subordinates in hammering out a consensus strategy. Strategy teams often
include line and staff managers from different disciplines and departmental units, a few
handpicked junior staffers known for their ability to think creatively, and near-retirement
veterans noted for being keen observers, telling it like it is, and giving sage advice.
4. The Corporate Entrepreneur Approach: In the corporate entrepreneur approach,
top management encourages individuals and teams to develop and champion proposals
for new product lines and new business ventures. The idea is to unleash the talents and
energies of promising corporate entrepreneurs, letting them try out business ideas and
pursue new strategic initiatives. Executives serve as judges of whom proposals merit
support, give company entrepreneurs the needed organizational and budgetary support,
and let them run with the ball.
W.L. Gore & Associates, a privately owned company famous for its Gore-Tex
waterproofing film, is an avid and highly successful practitioner of the corporate
entrepreneur approach to strategy making. Gore expects all employees to initiate
improvements and to display innovativeness.