WHAT IS BUSINESS STRATEGY, WHAT DOES IT ACHIEVE AND WHAT ARE THE LEVELS?
The phrase “business strategy” is used by one and every business person, both new and old. If business gurus do not mention it while they’re trying to develop a business strategy, it’s considered by a newbie who is trying to understand, “what is a business strategy.” Whichever the case, business strategy is one concept every business owner or manager should know about thoroughly. This piece gives you a brief introduction to business strategy, and it equips you with the foundational information you need to be aware of the concept of business strategy.
What is Business Strategy?
Simply put, business strategy is the course of action or set of decisions which assists a business owner, entrepreneur, or manager to achieve specific business goals. This strategy serves as the master plan that the management of a company implements to secure a competitive position in the market. This plan also helps a company carry out its operations, deliver excellent customer service, and achieve the overall business objectives.
Furthermore, this strategy serves as a long term sketch of the desired branding and direction of the business. The business strategy is carefully planned with intent and action and is flexibly structured to achieve business success. It equips a company with a framework to discover, analyze, and exploit beneficial opportunities, sense, and meet potential threats and make optimum use of strengths and resources available to counterbalance weakness and limitations.
A business strategy combines a company’s proactive actions. This is aimed to enhance the company’s market position and overall performance and reactions to unexpected developments and new market conditions. The maximum part of a company’s present strategy is usually a result of formerly initiated business actions and approaches. However, when market conditions turn unexpectedly, the company requires a strategic reaction to cope with that unexpected factor.
In one sentence, a strategy can be formulated both as a proactive response and as a reactive response.
What Does a Business Strategy aim to Achieve?
Comprehensively, a business strategy is designed with the purpose of;
- Perceiving and utilizing opportunities
- Achieving business effectiveness
- Mobilizing resources
- Attracting and retaining customers
- Securing an advantageous position
- Strengthening production, sales, and overall management
- Meeting challenges and threats
- Gaining command over every possible situation.
Levels of Business Strategy
There are three basic levels of business strategies;
- The Corporate Level Strategy
- The Business Level Strategy and the
- Functional Level Strategy
The Corporate-Level Strategy
The corporate-level strategy is a long-range, action-oriented, integrated plan formulated by a company’s top management. The corporate-level strategy is often used to ascertain business lines, takeovers, and mergers, expansion and growth, diversification, integration, investment opportunities, and so many other areas requiring critical managerial decisions.
The business-level strategies include all the strategies related to a particular business. These strategies serve as a blueprint for the company and cover all the business sectors. It’s what keeps a business running and is developed by managers, who convert the company’s mission and vision into concrete and goal-oriented strategies.
Functional Level Strategy
The first line managers and/or supervisors typically develop this. This level of business strategy involves decision making at the operational level. These decisions are made based on concerning particular functional areas like production, sales, marketing, human resource, finance, research, and development, etc.
When it comes to business, there is always a need for multiple business strategies at various levels. This is because a single plan is not only inadequate and improper but is not strong enough to carry your business to goal achievement. Because of this, a typical business should operate on the three different levels of business strategy and should build a robust connection between these individual levels and strategies.