Three levels of strategy

3-levels-of-strategyA strategy refers to a comprehensive action plan that provides long term direction and scope that guides an organization towards accomplishing its goals in a sustainable and competitive manner. A strategy provides the entire organization with a sense of direction or road map that leads it towards its mission and vision objectives. The strategy development process involves formulation, implementation, assessment and control.

An analysis of strategies implemented by various organizations indicates formulation at three levels

1. Corporate strategy
It directs the entire organization towards a sustainable competitive advantage. It begins with identification of the reasons why the organization exists. This becomes the mission statement of the organization. It also identifies where or what the organization wants to be in future. This becomes the vision of the organization. All other strategies are formulated in a way that helps to achieve this mission and vision.

The corporate strategy is concerned with culturing all the organizational units so that together, they can create more value than they would individually. To achieve this, organizational resources of human resource and capital must be distributed effectively among the organizational units.

2. Business strategy
It is established to offer a direction for a single business unit or product line within the organization. This strategy is formulated at the middle level of management and it must align to the corporate strategy.
This strategy is most suited for organizations that are competing in different business markets however, if the organization is young and small, the corporate and business strategy can function as one.
It is very important that the business unit’s strategy is aligned to the corporate strategy since the overall brand of the organization is very important.

3. Functional/team strategy
It is developed to guide the use of resources and focuses on activities within a specific business area or product line. It is is directed to a specific industry and is used to support other corporate and business strategies. The areas of application for functional strategies are production, distribution, marketing and finance management among others depending on the structure and core business of the entity.

Otuoma Sanya

Otuoma Sanya is a full-time systems librarian, tech enthusiast and writer. His areas of interest are data mining, institutional repositories, library automation and web development using python Django.

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