Business Strategy Hierarchy

Business strategy is a quite wide concept that encompasses all the business functions by integrating unique ideology in various functional areas of management. Business strategy is required to deal with the complexities and constraints of business management.

Business strategy is a systematic process comprising of a series of steps and sequence targeted at the growth of the organization. It can also be defined as development and execution of plans & activities pertaining to the vital and pervasive matters of the organization in a strategic manner.

Business strategy is comprehensive, integrated and unified approach taken in the right direction to assure that the basic goals and objectives of the enterprise are achieved.  Business strategy rests on the unique activities and the essence of strategy lies in performing the business activities differently.

Following are the levels of business strategy hierarchy:

Business Strategy Hierarchy

Business Strategy Hierarchy

Mission and Vision level

A company’s vision and mission are the core values of the organization which are central to the firm. These are the core purposes, that is, the reason that why the firm exists. The vision is quite simply the desired future for the business put over in such a way that motivates the other people.

To develop an effective business strategy at the vision and mission level, the higher authorities of the organization are required to have a strategic intent. Strategic intent in visions is a desired leadership position to establish the criterion the organization will chart its progress.  The management is required to keep on invoking challenges to reach the desired outcome. Business strategy at this level is required to capture the essence of winning.

Corporate Level

Corporate level strategy is the road level strategy which can also be defined as the decomposition of the mission or vision into a plan of action at the organization level to achieve the organizational objective. It covers various strategies and functions which are in line with the objectives of the company.

Functional Level

The functional level strategy is required to be in line with the objectives which are derived from the corporate goals. The strategy at this level is required to cover the allocation of resources among functional areas and to establish the coordination between the corporate & business unit level, both in objectives & functional strategies for optimization. This level strategy deals with relatively smaller parts of business providing objectives for a specific business function like production, marketing, finance or operations.

Operational level

In the dynamic environment and due to the complexities of business, strategies are needed to be set at lower levels also which are one step down the functional level. These strategies are known as operational level strategies. These are more specific and are required to deal with well-defined scope, for example, a marketing strategy at the operational level gets further subdivided into sales strategy for different segments, markets, pricing, distribution, product development and advertising, The strategies at this level need to have synergies and are required to contribute to the functional objectives of the organization.

Leave A Response »


8 × one =