Levels of StrategyMaking in a SingleBusiness Company ExecutiveLevel

Levels of Strategy-Making in a Single-Business Company Executive-Level Managers Business Strategy Two-Way Influence Functional Managers Functional Strategies Two-Way Influence Operating Managers Operating Strategies

Corporate Strategy for a Diversified Company Narrow or broad-based diversification Is diversification related, unrelated or a mix? Approach to capital allocation Efforts to capture cross-business strategic fits Corporate Strategy Moves to divest weak business units Scope of geographic operations Moves to add new businesses Moves to build positions in new industries

Tasks of Corporate Strategy • Moves to achieve diversification • Actions to boost performance of individual businesses • Capturing valuable cross-business strategic fits that result in 1 + 1 = 3 effects! • Establishing investment priorities and steering corporate resources into the most attractive businesses

Components of a Single. Business Company’s Strategy Planned, proactive moves to outcompete rivals Responses to changing conditions Efforts to build competitive advantage Business Strategy R&D strategy Supply chain management strategy Fu n ct Scope of geographic coverage io Manufacturing strategy Marketing strategy na l. S tra te gi es Finance strategy Human resources strategy Collaborative partnerships and strategic alliances

Business Strategy Involves • Forming responses to changes in industry and competitive conditions, buyer needs and preferences, economy, regulations, etc. • Crafting competitive moves to produce sustainable competitive advantage • Building competitively valuable competencies and capabilities • Uniting strategic initiatives of functional areas

Functional Strategies • Game plan for a strategicallyrelevant function, activity, or business process • Details how key activities will be managed • Provide support for business strategy • Specify how functional objectives are to be achieved

Operating Strategies • Concern narrower strategies for managing grassroots activities and strategicallyrelevant operating units • Add detail to business and functional strategies

Uniting the Company’s Strategy. Making Effort • A company’s strategy is a collection of strategies and initiatives being acted on by managers at various organizational levels • Separate levels of strategy must be unified into a cohesive, companywide action plan • Pieces of strategy should fit together like the pieces of a puzzle