A strategic issue is a fundamental policy question or critical challenge affecting an organization's

mandates, mission, values, stakeholders, resources, structure, processes, management, or product or

service level and mix.

4 Levels of Strategy-Making / 4 Types of Strategic Alternatives

Strategy-making is involved with the identification of the ways that an organization can undertake to
achieve the performance targets, weaken the competitors, achieve competitive advantage and ensure
the long-term survival of the organization.

In a diversified company, a company having different lines of business under one umbrella, strategies are
initiated at four levels.

Features of Strategic plans

The following are some of the most important characteristics of strategic plans:

They are long-term in nature and place an organization within its external environment.

They are comprehensive and cover a wide range of organizational activities.

They integrate guide and control organizational activities for the immediate and long-range future.

Business level strategy.

Functional level strategy.

Operational level strategy.

Corporate-level strategy

Corporate strategy defines the markets and businesses in which a company will operate.

Corporate strategy is formulated at the top level by the top management of a diversified company (in our
country, a diversified company is popularly known, as ‘group of companies’, such as Alphabet Inc.). Such
a strategy describes the company’s overall direction in terms of its various businesses and product lines.

Corporate strategy defines the long-term objectives and generally affects all the business-units under its
umbrella.The corporate-level strategy is the set of strategic alternatives from which an organization
chooses as it manages its operations simultaneously across several industries and several markets.

Business-level strategy

Business strategy defines the basis on which firm wilt compete.

It is a business-unit level strategy, formulated by the senior managers of the unit. This strategy
emphasizes the strengthening of a company’s competitive position of products or services.

Business strategies are composed of competitive and cooperative strategies.

The business strategy encompasses all the actions and approaches for competing against the
competitors and the ways management addresses various strategic issues.
As Hitt and Jones have remarked, the business strategy consists of plans of action that strategic
managers adopt to use a company’s resources and distinctive competencies to gain a competitive
advantage over its rivals in a market.

Functional strategy

A functional strategy is, in reality, the departmental/division strategy designed for each organizational
function.

Thus, there may be production strategy, marketing strategy, advertisement strategy, sales strategy,
human resource strategy, inventory strategy, financial strategy, training strategy, etc.

A functional strategy refers to a strategy that emphasizes a particular functional area of and organization.
It is formulated to achieve some objectives of a business unit by maximizing resource
productivity.Sometimes functional strategy is called departmental strategy since each business-function
is usually vested with a department. Other functional strategies such as marketing strategy, advertising
strategy, and financial strategy are also to be formulated appropriately to support the business-level
competitive strategy.

Operating strategy

Operating strategy is formulated at the operating units of an organization. A company may develop
operating strategy, as an instance, for its factory, sates territory or small sections within a
department.Usually, the operating managers/field-level managers develop an operating strategy to
achieve immediate objectives. In large organizations, the operating managers normally take assistance
from the mid-level managers while developing the operating strategy.in some companies; managers
“develop an operating strategy for each set of annual objectives in the departments or divisions.

Conclusion

Companies today compete in a variety of industries and markets. So; as they develop business-level
strategies for each industry or market, they also develop an overall strategy that helps define the mix of
industries and markets that are of interest to the firm. These levels provide businesses a rich
combination of strategic alternatives.