Business Strategy

Dr. Sami Ullah

 Learning Outcomes
In this chapter you will learn
• The need for, and purpose of, strategic and business
analysis
• How strategy may be formulated at different levels
(corporate, business level, operational) of an
organization?
• Analyze how strategic management is affected by
different organizational contexts
• The expectations of stakeholders and the influence of
ethics and culture
 What is Strategy
• Strategy is the direction and scope of an
organization over the long term, which
achieves advantage in a changing
environment through its configuration of
resources and competences with the aim of
fulfilling stakeholder expectations.
 Characteristics of strategic decisions

• There are five characteristics of strategic

decisions:
– Complex
– Uncertain
– Impact on Operations
– Integrated Approach
– Change Oriented
 Levels of strategy in an organization

• There are three main levels of strategy in an

organization.
– Corporate: the general direction of the whole
organization
– Business: how the organization or its SBUs tackle
particular markets
– Operational/functional: specific strategies for
different departments of the business
 Corporate strategies
• Corporate strategy is concerned with the overall purpose
and scope of the organization and how value will be added
to the different parts (business units) of the organization.
• Scope of activities
– impact upon the whole organization
• Expectations of Stakeholders
– Stakeholder expectations must be prioritized and managed.
• Resources
– Strategy involves choices about allocating or obtaining corporate
resources, now and in future.
 Business-level strategy
• Business strategy is about how to compete
successfully in particular markets.
– Scope limited to particular and distinct
combination of products and markets dealt with
by one business unit
– SBU level Strategies must be co-ordinated with
corporate strategy and with each other.
 Operational strategies
• Operational strategies are concerned with
how the component parts of an organization
deliver effectively the corporate- and
business-level strategies in terms of resources,
processes and people.
– Operational strategy is created by individual
business functions (Marketing, Finance, HRM,
Production etc.) and delivered by them.
 Scenario
Shakarganj Milk sells dairy products and other FMCGs. The
Chief Financial Office says: 'We plan to issue more shares
to raise money for installation of a new plant – we prefer
not to choose debt financing because of high interest rates
– which will enable us to compete better in the vital and
growing markets of Middle East. After all, we've promised
the a 7% growth in profits for our shareholders, and
trading is tough.'

Identify the corporate, business and functional strategies

in the above statement.