BUSINESS AND FUNCTIONAL LEVEL STRATEGIES

A business organization of whatever kind is legally considered a

person that can sue and be sued.

 Observe the norms and standards as needed.

 Live with the requirements of laws
 Observed the local and international standards that have to be
observed
 Direct competitors Stockholders/Owners Indirect competitors

Management/Employees Government
The business
Organization
Stakeholders group Global/Regional
forces

Business and Other factors and Religious, cultural

ethical standards considerations and other traditions
Understanding the Business and Its Environment
 Performance
Products Synergy & fit
Customers Structure
Competitive
THE Parenting
Advantage
ORGANIZATION
Stakeholders Process

Environments Markets

Understanding Strategy and Organization

Business level strategy
 is more focused and meant for the single business concern or
a small business unit.
 is the operational plan of actions of a single and independent
business that uses the company’s resources and competencies
to gain a competitive advantage over its rivals in the market or
industry.
Hierarchy of Strategy
Level of Strategy-making in a Diversified Company
Risks of Single Business Concerns

a. Putting all the “eggs” in one industry basket

b. Missing profitable business opportunities on account
of lack of resources and skills to do so.
c. Unforeseen changes can undermine a single business
firms prospects.
Risks of Single Business Concerns

d. Changing customer needs

e. Technological innovation
f. If markets becomes unattractive, the firm’s prospects can
quickly dim- It implies zero demand for the product means
eventual exit from the business.
g. Options to grab other opportunities are limited.
h. Entry of substitutes
Competitive strengths of business level strategies
1. Less ambiguity about “who we are.”
2. Energies of firm can be directed to a single business path
and keeping strategy responsive to industry change.
3. Less chance resources will be stretched thinly over too
many competing activities.
4. Resources can be focused on building competencies and
capabilities that make the firm better at what it does,
5. Higher probability innovative ideas will emerge
6. Top executives can maintain hands-on contact with core
business
7. Important competencies more likely to emerge.
8. Ability to parlay experience and reputation into sustainable
competitive advantage.
9. Prominent leadership position