Professional Documents
Culture Documents
Business and Functional Level Strategies
Business and Functional Level Strategies
FUNCTIONAL
LEVEL
STRATEGIES
ESCORIAL, SHEIVA MARIE
MONTILLA, DARLENE
PLATON, DIANE
Strategic
Business
Unit
Williamson, Jenkins, et al. (2004)
defined as a unit that produces
products or services for which there
is identifiable group of customers.
Can be also defined geographically
or according to the nature of their
operations.
Understanding the
Business and Its
Environment
Direct
competitors
Management/Employ
ees
Stakeholder
groups
Business and
ethical standards
Stakehold
ers/owners
The
business
organizati
on
Other factors
and
considerations
Indirect
competitors
Government
Global/Regional
forces
Religious, cultural
and other
traditions
Understanding Strategy
and the Organization
Performance
Products
Customers
Competitive
advantage
Stakeholders
Structure
THE
ORGANIZATIO
N
Parenting
Process
Markets
Environments
Resources and
Capabilities
Difference
Business Level Strategy
Orchestrates the various functional units
to make itself competitive and profitable
on-going concern.
Occurs at the business unit emphasizing
the improvement of the competitive
position of the firms products or
services in the specific industry or
market segment served by the business
unit
Difference
Business Level Strategy
Seeks to synchronize various functional
units and their respective functional
strategies into a consistent and well
coordinated efforts to achieve the vision
of the business organization
Concerns with the question of how
should the company compete in the
chosen business
Difference
Corporate Level Strategy
Orchestrates how the other members of
the business group would conduct their
business
Synchronize various business units
comprising of individual or chartered
organizations
Concerns with the question as to what
business or business areas do we want
to be in.
Hierarchy of Strategy
CORPORATE
STRATEGY
BUSINESS
(DIVISION LEVEL
STRAATEGY)
FUNCTIONAL
STRATEGY
Level of Strategy-making in a
Diversified Company
Corporate-level
Managers
Business-level
Managers
Corporat
e
strategy
Two-way Influence
Business Strategies
Two-way Influence
Functional
Managers
Functional Strategies
Two-way Influence
Operating
Managers
Operating Strategies
Example of a Functional
Organization Chart
PRESIDENT
EXECUTIVE VICEPRESIDENT
VICEPRESIDEN
TMARKETIN
G
MARKETING
MANAGER
VICEPRESIDENTMANUFACTURI
NG
MANUFACTURI
NG MANAGER
VICEPRESIDENTADMINISTRATI
ON
VICEPRESIDENT
-FINANCE
ADMINISTRAT
IVE MANAGER
FINANCE
MAANGER
Functional Responsibilities VS
Functional Strategies
Functional Responsibilities
Refers to those task, function or activities that
a given operating unit is duty-bound to do by
the very nature of its functional category
Functional Strategies
Approach taken by a functional area or unit to
achieve its objectives and duties by way of
maximizing the use of its resources and in
light of strategic direction as well as
prevailing market competitions
Interrelationship among
Functions
Production/
Operations
Management
Purchasing
and Materials
Management
Research and
Development
Finance
Human
Resource
Management
Marketin
g
Management
Information
System
Marketi
ng
Finance
Functional Strategies
Characteristics:
It is a game plan for a strategicallyrelevant function, activity, or
business process
It provides details how key activities
will be managed
Its provides a supportive role to the
business level strategy
It specifies how functional objectives
are to be achieved
Functional Strategies
highlight the role of every
department or unit in terms
of:
Role and scope of activities of
each department or unit
It provides the direction which
department needs to pursue
It defines the contribution to
firms overall mission
Operating Strategies
More specific and operational
compared to functional strategies as
the tasks are usually done at ground
level with more precise details
Concerns of Operating Strategies:
a. narrower strategies for managing
grassroots activities and strategicallyrelevant operating units
b. add detail to business and functional
strategies
Strategic Business-Level
Options
1. Product Development Option
a research and development
option that seeks to develop new
product or service resulting to a
variety of products or services the
company
can
offer
thereby
accessing other market segments
or sectors
Strategic Business-Level
Options
2. Market Development
Seeks to explore additional
market share by developing
other
markets
in
other
geographical areas using the
same line of products or
services.
Strategic Business-Level
Options
3. Market Penetration
Pursuing concentrated and vigorous
efforts to push a product or service
using a variety of marketing strategies
or
tools
generally
focused
on
promotional efforts. It concerns with
dealing with existing products or
services but it requires substantial
marketing efforts to push harder the
product to expand sales in the same
market segment or to serve and