Strategic management is an essential part of any successful business. It involves the development of a plan to achieve the desired objectives of an organization, and understanding the three levels of strategy is key to ensure that the plan is effective. These levels are corporate, business and functional, and each has its own unique focus and purpose. At the corporate level, strategy focuses on the overall direction of the organization.
This includes setting goals and objectives, determining how resources will be allocated, and developing a competitive advantage. It also involves making decisions about mergers and acquisitions, as well as other strategic investments. At the business level, strategy focuses on how to best position the organization in its industry. This includes developing a competitive advantage, creating a unique value proposition, and developing a marketing strategy.
It also involves making decisions about product development, pricing, and distribution. At the functional level, strategy focuses on how to best use resources to achieve the desired objectives. This includes developing processes and procedures to ensure that resources are used efficiently and effectively. It also involves making decisions about staffing, training, and technology. Once these three levels of strategy have been established, it is important to use strategic management tools and models to ensure that they are implemented effectively. These tools include SWOT analysis, Porter's Five Forces Model, Balanced Scorecard, and Value Chain Analysis.
Each of these tools can help organizations identify opportunities for improvement and develop strategies to capitalize on them. In conclusion, understanding the three levels of strategy is essential for any successful business. By understanding how each level works together to achieve organizational objectives, businesses can create effective strategies that will help them reach their goals.