Topic 1: Levels of Strategy

1. Corporate Strategy
2. Business Strategy (Captain America - The Tactical Commander)

It is a set of decisions that provides ways on how the organization competes in the industry it
chooses to be in and eventually sustains a competitive advantage.

Business strategy defines how a specific business unit competes and excels in the market. It's
about making crucial decisions on:
- market positioning,
- product development, and
- ensuring that the organization thrives in the face of competition.

Example: S.H.I.E.L.D

Advantages
● Adaptability: Business strategy can quickly adjust to changes in the market.
● Market Focus: Specifies the target audience and market position.
● Competitive Edge: Helps the organization stand out in a crowded market.

Disadvantages
● Limited Perspective: Can be narrowly focused and miss opportunities in other markets.
● Risk Concentration: If the strategy isn't diversified, it can be risky if the market changes
dramatically.

3. Functional Strategy (Thor, Hulk, Black Widow - The Specialized Specialists)

It is also known as operational strategy. It comprises decisions in the different functions of the
organization that support the business strategy.
These functions include:
- marketing
- production
- finance
- research and development
- human resources
Advantages:
● Efficiency: it maximizes output by optimizing organizational functions
● Expertise: it fosters excellence within individual departments
● Innovation: it promotes continuous improvement and innovation

Disadvantages:
 ● Resource competition: it can lead to internal conflicts between departments as they
compete for resources;
● Lack of a holistic view: it can cause departments to overlook the larger picture and the
impact on other departments.

Functional Strategy in Marketing

Functional strategy refers to the specific approach or plan that a particular functional area within
an organization adopts to support the overall business strategy.

Marketing is the process of promoting and selling products or services by utilizing various
strategies and tactics.

1. CUSTOMER ANALYSIS: It involves analyzing the customer’s personalities, economic

status, and other demographical aspects to understand the company’s audience or
customer base.
2. SELLING OF PRODUCT AND SERVICES: It is not just selling the product or services. It
also includes other steps aimed at persuading potential customers to make a purchase
like advertising and promotion, especially if there is a new product and services.
3. PRODUCT OR SERVICE PLANNING: This function involves the process of
conceptualizing, developing, and bringing product or service to market.
4. PRICING: this function involves determining the appropriate price for products or
services based on a variety of factors. Consider different pricing strategies for different
customer segments, taking into account factors like willingness to pay, purchasing
power, and value perception.
5. DISTRIBUTION: this includes the process of getting products or services from the
manufacturer or producer to the end consumer. Distribution plays an important role in
ensuring that products or services are available and accessible to customers in the right
place and at the right time.
6. OPPORTUNITY ANALYSIS: this involves identifying and evaluating potential
opportunities in the market that can lead to business growth and success. Companies
determine whether benefits outweigh the costs.

E-commerce has essentially changed the way business is conducted. There is a

constant restructuring of business processes to enable companies to attract more
customers via the worldwide web.

Advantages of e-commerce

1. Faster buying process

2. Store and product listing creation
3. Cost reduction
4. Affordable advertising and marketing
 5. Flexibility for customers
6. No reach limitations
7. Product and price comparison
8. Faster response to buyer/market demands
9. Several payment modes
10. Enables easy exports

Niche products are specialized or unique goods and services that cater to a specific,
small, and well-defined segment of the market. They often target a particular group of
customers with distinct preferences or needs.

Customer-centered strategy enables a company to pull out information from consumers

to improve the company’s performance.

McKinsey’s 7S Model- Introduction

● Developed by Peterson & Waterman at McKinsey & Company in the early 80’s.
● The model is based on 7 internal company factors that must be aligned together
for successful implementation of the strategy in the company.
Use of the Model
● Improve the performance of a company.
● Examine the likely effects of future changes within a company.
● Align departments and processes during a merger or acquisition.
● Determine how best to implement a proposed strategy.

McKinsey’s 7S Model
Hard elements of the model

Strategy

The company’s plan on how they;

● intend to achieve our objectives (mission & vision);
● responds to opportunities and threats from environment (strategy
awareness);
● deal with competitive pressure (competitive advantage); and
● its explanation to external subjects not only to internal

Structure
● The way how the company is structured.

o Hierarchical- the chain of command within a company that begins with senior
management and executives and extends to general employees.

o Flat- a company with few or no hierarchical levels between employees, which

means that all employees have essentially the same power and authority.

O Centralized- organizational structure relies heavily on top-down decision-

making

o Decentralized- structure that distributes decision-making authority throughout

the entire company, rather than concentrating it at the top.

● It is the line of command, control and communication within a company.

● organizational structure supports the implementation of the strategy

Systems

● everyday activities and processes carried out by employees

● it is about systems of planning, control and information
● that support the implementation of the strategy.
Soft elements of the model;

Style - Management style of the company’s leadership. The way the company is
managed by top-level managers, how they interact, what actions they take and their
symbolic value.

Staff – Element is concerned with what type and how many employees an organization
will need and how they will be recruited, trained, motivated and rewarded. Companies
should have right people on the right place.

Skills – actual skills and abilities of a company's employees.

Shared values – Shared values reflect a company’s norms, standards, beliefs, and
attitudes. Shared values are expressed in the organization’s vision, mission, and
objectives.

Application of the model (Step-by-step Process)

Step 1. Identify the areas that are not effectively aligned

Step 2. Determine the optimal organization design

Step 3. Decide where and what changes should be made

Step 4. Make the necessary changes

Step 5. Continuously review the 7s

McDonald’s McKinsey’s 7-S model (Example)

Strategy: Cost-leadership approach and setting clear SMART goals to achieve the
long-term and short-term vision.

Structure: Flat structure where a store manager manages its employees.

Systems: McDonalds app and self-ordering kiosks.

Shared Values: Serve, Inclusion, Integrity, Community, and Family.

Style: The leadership style at McDonald’s is participative.

Staff: McDonald’s has over 210,000 employees.

Skills: McDonald’s regularly trains its employees.