Strategic management is the key to the long-term growth of a company. It means coming up with, implementing, and keeping an eye on tactics in an organized way so that you can reach your goals and gain a competitive edge. Strategic management is a broad term that includes many different types of important business plans. In this article, we’ll look at the types of strategies and how important they are to the performance of a business.
Corporate-level strategy deals with an organization’s broad issues. It emphasizes on choices that affect the company’s overall orientation, including resource distribution across various business divisions, mergers and acquisitions, and diversification. This kind of strategy establishes the parameters of an organization’s activities, identifying the markets or sectors it ought to enter or leave. Corporate strategy plays a key role in defining an organization’s identity and directing its expansion.
For instance, a conglomerate like General Electric uses a corporate-level strategy by working in a variety of sectors, from aviation to healthcare. This enables it to utilize industry synergies while controlling risk.
Business-level strategies are types of strategies that go further into the competitive landscape of a certain business unit’s selected market niche. Cost leadership, differentiation, focus (niche), and integrated cost leadership/differentiation are often used business-level techniques. These tactics specify how a business unit presents itself in comparison to rivals.
Apple Inc. is a well-known illustration of a differentiation strategy. It distinguishes itself from rivals in the IT business by concentrating on creative design, user-friendly interfaces, and brand image while charging premium rates for its products.
Marketing, operations, human resources, and finance are just a few of the departments or activities inside a company where functional-level plans are produced. These plans show how each department contributes to the overall corporate and business plans.
For instance, to support the organization’s business-level differentiation strategy, the marketing department may use a functional-level plan that prioritizes social media and digital marketing.
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