Business Level

Business level strategies are formulated for specific strategic business units and
relate to a distinct product-market area. It involves defining the competitive
position of a strategic business unit. The business level strategy formulation is
based upon the generic strategies of overall cost leadership, differentiation, and
focus. For example, your firm may choose overall cost leadership as a strategy
to be pursued in its steel business, differentiation in its tea business, and focus in
its automobile business. The business level strategies are decided upon by the
heads of strategic business units and their teams in light of the specific nature of
the industry in which they operate.

Example: Which business level strategy does Coca-Cola use?

    Coca-Cola uses the differentiation strategy to make themselves unique and separated from other
companies. By using the differentiation strategy, Coke creates a product and service that is unique and
valued. They also have non-price attributes that customers will pay a premium for. 
   Coke differentiates themselves by using unique marketing and advertising campaigns to entice their
customers to stay loyal to their brand by continuing to purchase coca-cola products versus one of the
many competitors. They also have different bottle shapes. Research has been conducted that shows
people feel better about themselves and skinnier if the bottle is shaped like a curvy, but slim body shape.
Another great differentiation strategy Coke has done, is the above Coca-Cola Freestyle machine. This
machine allows customers to mix and match their classic Coca-Cola beverages with many different
flavors.
   Coke will need to continue to work hard at using the differentiation strategy to keep themselves
separated from its competitors. To do this, Coca-Cola will need to keep introducing new beverages that
will maintain customers' brand loyalty. Another way to differentiate themselves would be to use alcohol
drinking culture to their advantage. For example, many drinks are ordered as a "rum and Coke", "Captain
and Coke" or "whiskey and Coke". Coca-Cola could collaborate with Captain Morgan or a whiskey
company and sell attached 3 ounce bottles of liquor with a Coke bottle. Finally, Coca-Cola has a great
tasting drink that people have loved for decades and will continue to purchase their product if Coca-Cola
works hard to maintain their great Coke taste and innovative ways to present it to their customers.

Functional Level

Functional level strategies relate to the different functional areas which a

strategic business unit has, such as marketing, production and operations,
finance, and human resources. These strategies are formulated by the functional
heads along with their teams and are aligned with the business level strategies.
The strategies at the functional level involve setting up short-term functional
objectives, the attainment of which will lead to the realization of the business
level strategy.

Example: For example, when Coca-Cola decided to expand in its

Japanese market, it developed a wide range of marketing strategies,
including establishing a distribution sales force, installing a number of
vending machines at strategic locations and investing heavily into
promotion of the product. As a result, Coca-Cola- captured nearly 70
percent of Japanese market for soft drinks.

For example, the marketing strategy for a tea business which is following the
differentiation strategy may translate into launching and selling a wide variety
of tea variants through company-owned retail outlets. This may result in the
distribution objective of opening 25 retail outlets in a city; and producing 15
varieties of tea may be the objective for the production department. The
realization of the functional strategies in the form of quantifiable and
measurable objectives will result in the achievement of business level strategies
as well.

Summary:
1. Corporate Level Strategy:
 Defines the business areas in which your firm will operate.
 Involves integrating and managing the diverse businesses and
realizing synergy at the corporate level.
 Top management team is responsible.
2. Business Level Strategy:
 Involves defining the competitive position of a strategic business
unit.
 Decided upon by the heads of strategic business units and their
teams.
3. Define specific tactics and strategies for each market the organisation is involved
in
4. Define how each business unit will deliver the planned tactics


5. Functional Level Strategy:
 Formulated by the functional heads along with their teams.
 Involve setting up short-term functional objectives.

6. Day-to-day actions which are required to deliver corporate and business
strategies
7. Relationships needed between units, departments and teams
8. How operational goals will be met, and how they will be monitored