Levels of Strategy
One dimension of strategy is its various levels. All businesses should have a multi-level strategy to keep the focus of the business on a clear, straight path. There are four levels of strategy: corporate, business unit, functional and operational. Your business might need to place greater emphasis on one over the other at various times, but implementing the strategy at all four levels is crucial for success. Let’s take a closer look at each level.
• Corporate Level Strategy: Designing the company’s vision and mission as well as selecting the primary business activity, products, and markets to enter.
• Business Unit Strategy: Determining business lines and divisions, how to deal with competition, profit centers, geographical differences and the implementation of technological advancements.
• Functional Level Strategy: Figuring out the marketing, finance, research and production processes.
• Operational Strategy: How each part of the business is organized to deliver the corporate and business-unit level strategic direction and functional strategies. Operational strategy deals with the four building blocks of business: Processes, People, Customers, and Resources. To learn more about operational strategy visit our past article "Four Building Blocks of Business" by clicking here.
Successful businesses have clear, written goals for each of the strategy levels. This not only reduces confusion on the direction the business is headed, but it helps management make important business decisions. Which level do you think is most important for your business? Let us know in the comments!
The Difference Between Long-Term and Strategic Planning
Another dimension of strategy is comprised in the planning process. How leaders plan, design and replan their business strategy is an important component of competent management. Business leaders must utilize long-term and strategy planning. Long-term and strategic planning both have the same goal of guiding the business on the path to success, but the objectives utilized to get there have different time frames.
Long-term planning defines the vision, creates a three-to-five-year outline of projections and is also not as detailed on the methods, procedures and tasks.
Strategic planning, partly due to the shorter time frame, is more detailed and specific on the tasks needed to reach goals. Businesses should create both long-term and strategic planning goals to ensure the business continues to move forward. Long term planning focuses on defining the vision of the business while strategic planning focuses on the milestones necessary to push the business closer to the vision. Strategic planning entails SWOTT, PEST and data analyses, forecasting, budgeting, a planning process and an effective performance management system. To learn more about the importance of strategic planning visit our past article "Why is Strategic Planning so Important" by clicking here.
In Summary
As business executives, it is your job to lead your company to not only financial success but overall business success as well. The first step on the path to maintaining and building market share is to define the strategies and planning goals that your organization needs to focus on. Whether this is a new journey or you need a fresh perspective, the process can seem daunting, but luckily Sabacon Consulting is an expert at assisting businesses design and implement strategic and planning goals. What new strategies and planning goals are you thinking about implementing in your company after reading this? Let us know down below.
Sources: Kabeyi, Moses. “Organizational strategic planning, implementation and evaluation with analysis of challenges and benefits.” International Journal of Applied Research, 2019.