Business and Functional Level Strategy

Strategic Business Unit

Strategic Business unit defined as:
Unit that produces products or services for which there is identifiable group of customers
Geographically Nature Autonomy

Understanding Strategy and the Business Organization

Business organizations follow the entity concept
Can sue and be sued Separate and distinct from its owners Has to observe norms and standards as it sees fit

Business Level Strategy

Business level strategy
Operational plan of action Uses companies resources Orchestrates various functional units (e.g marketing, production, administration, etc)

Business level strategy is more focused and meant for the single business concern

Considerations in Business Level Strategy

Areas of concern:
Specific responses Scope of geographic coverage Collaborative alliance Financial strategy (overall and specific) Research and development strategy Competitive advantage

Risks of Single Business Concerns

Being independent and a solo or single business concern means accepting some risks as follows:
All eggs in one industry basket Missing profitable opportunities Unforeseen changes Changing customer needs Tech innovation

Risks of Single Business Concerns

Prospects quickly dim Limited options Limited opportunities

Competitive Strengths of Business Level Strategy

Pluses of single business
Less ambiguity Energy direction Less chance of resources being stretched thin Resources focused on building competence High probability of emergence (ideas and competencies) Top execs maintain hands on contact

Competitive Strengths of Business Level Strategy

Ability to parlay Prominent leadership position