Three Levels of Enterprise Strategy
Enterprise strategy can be formulated and
implemented at three different levels:
Business unit level
Functional or departmental level
At the corporate level, you are responsible for
through your businesses. You do so by managing your portfolio of businesses,
ensuring that your businesses are successful over the long term, developing
business units, and sometimes ensuring that each business is compatible with
others in your portfolio.
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Products and services are developed by
business units. The role of the corporation is to manage its business
units, products and services so that each is competitive and so that each
contributes to corporate purposes.
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Corporate Level Strategy
Corporate level strategy fundamentally is
concerned with selection of businesses in which your company should compete
and with development and coordination of that portfolio of businesses.
Corporate level strategy is concerned with:
Reach – defining the issues that are corporate responsibilities.
These might include identifying the overall
mission, and goals
of the corporation, the type of business your corporation should be
involved, and the way in which businesses will be integrated and
Competitive Contact – defining where in your corporation
competition is to be localized.
Jack Welch's 5 Strategic Questions
Managing Activities and Business Interrelationships – corporate
strategy seeks to develop
by sharing and coordinating staff and other resources across business
units, investing financial resources across business units, and using
business units to complement other corporate business activities.
Management Practices – corporations decide how business units are
to be governed: through direct corporate intervention (centralization)
or through autonomous government (decentralization).
Business Unit Level
A strategic business unit may be any profit
center that can be planned independently from the other business units of
your corporation. At the business unit level, the
strategic issues are about both practical coordination of operating units
and about developing and sustaining a
for the products and services that are produced.
Functional Level Strategy
The functional level of your organization is
the level of the operating divisions and departments. The strategic issues
at the functional level are related to functional
business processes and
value chain. Functional level
strategies in R&D, operations, manufacturing, marketing, finance, and human
resources involve the development and coordination of resources through
which business unit level strategies can be executed effectively and
Functional units of your organization are
involved in higher level strategies by providing input into the business
unit level and corporate level strategy, such as providing information on
customer feedback or on
on which the higher level strategies can be based. Once the higher level
strategic intent is
developed, the functional units translate them into discrete action plans
that each department or division must accomplish for the strategy to