Types of Strategies

Introduction

The business environment is complex and dynamic.  This means that the intended strategy is likely to have to be amended to take account of new circumstances.  Therefore, at any one moment in time an organisation’s strategy is likely to comprise part of an original (planned) strategy and part of an emergent strategy.

Some organisations lose their competitive position because they stick rigidly to the intended/planned strategy.  There are a variety of reasons for this.  For example, changing direction can be seen as an admission that the original plan was a mistake.  The organisation’s culture is a powerful influence on strategic management and may result in a reluctance to change.  Remember; it was not carriage makers that developed the auto-mobile; nor main frame computer manufacturers that developed PC’s.

Levels of strategy

Strategy can be identified at three distinct levels within organisations:

  • Corporate strategy
  • Business Unit strategy
  • Functional strategy

Corporate strategy

Corporate strategy is concerned with the scope of an organisation’s activities and the matching of these to the organisation’s environment, its resource capabilities and the values and expectations of its various stakeholders.  It deals with what sectors the business is in, or should be in, and how integrated these businesses should be with one another.

Business Unit strategy

Business unit strategy is concerned with how each business attempts to achieve its mission within its chosen area of activity.  Here, strategy is about which products or services should be developed and offered to which markets, and the extent to which the customers needs are met whilst achieving the objectives of the organisation.

Functional strategy

Functional strategy examines how the different business functions, such as marketing, finance, operations and human resources, support the corporate and business unit strategies.