Management Science

Lesson 10
Business Strategy

Learning Objectives
1. Define business strategy
2. Explain the three levels of business strategy
3. Describe the nature of business strategy

Discussion

Business strategy can be defined as a course of action or set of decisions that helps entrepreneurs achieve
specific business goals.

It is a master plan that a company's management implements in order to secure a competitive position in
the market, carry on operations, please customers, and achieve the desired business outcomes.

In business, it is a long-term sketch of the organization's desired image, direction, and destination. It is a
plan of corporate intent and action that is carefully planned and flexible in order to:

• Achieving effectiveness,
• Recognizing and capitalizing on opportunities,
• Allocating resources,
• Securing a favorable position,
• Dealing with challenges and threats,
• Directing efforts and behavior, and
• Gaining command of the situation

A business strategy is a collection of competitive moves and actions used by a company to attract
customers, compete successfully, strengthen performance, and achieve organizational goals. It outlines
how business should be conducted in order to achieve the desired results.

Business strategy provides top management with an integrated framework for discovering, analyzing,
and exploiting beneficial opportunities, detecting and responding to potential threats, making the best
use of resources and strengths, and counterbalancing weakness.
Corporate strategy: A corporate strategy is a long-term, action-oriented, integrated, and comprehensive
plan developed by top management. It is used to determine business lines, expansion and growth,
takeovers and mergers, diversification, integration, new investment and divestment areas, and so on.

Business-level strategy refers to strategies that are specific to a particular business. It is created by
general managers, who translate the mission and vision into concrete strategies. It's like a blueprint for
the entire company.

Functional level strategy: Developed by first-line managers or supervisors, functional level strategy
entails operational decision making in specific functional areas such as marketing, production, human
resources, research and development, finance, and so on.

In business, multiple strategies at various levels are always required because a single strategy is not only
insufficient but also incorrect. As a result, a typical business structure always has three levels.

Nature of Business Strategy

A business strategy is a combination of proactive actions taken by management to improve the

company's market position and overall performance, as well as responses to unexpected developments
and new market conditions.

The majority of the company's current strategy is the result of previously initiated actions and business
approaches, but when market conditions take an unexpected turn, the company needs a strategic
response to deal with contingencies. As a result, in the event of an unexpected development, a portion of
the business strategy is developed as a reasoned response.