Companies need various types of strategies depending upon nature and scope of business. In case of a company dealing with single product line/business formulates the strategies in two levels;
- Corporate/Business Level
- Functional Level In other hand, a company dealing with multi product line /business formulates the strategies in two levels;
- Corporate Level
- Business Level
- Functional level
The level of strategy is illustrated in following figure
Corporate level strategy- It gives overall direction of the company in term of its broader attitude towards growth, succession and management philosophy to drive the business. The major purpose of corporate strategy, are;
- Determine overall scope of the organization
- Add value to the different business units
- Meet expectations of stakeholders.
Corporate strategy, typically, fits the business with predictability, sustainability, profitability, and de-risking (PSPD).
Business level strategy- It gives specific direction at the business unit or product level. It normally aims at strengthening the competitive position in the market served by the particular business unit or product line of the company. For this purpose, business strategy may be of product differentiation, cost leadership, quality improvement etc.
Functional Strategy-It gives techniques and approaches in functional areas to achieve corporate and business objective. It refers to functional guidelines to the employees at operating levels. Functional strategy consists of the managerial and operational game plan for running a major functional activity or process within the particular business unit. It is short term strategy.