Types of Business Strategy - Explained
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What are the Types of Business Strategy?
There are generally 4 Types of Business Strategies:
- Organizational or Corporate
Each of these is discussed below.
Back To: BUSINESS STRATEGY
What is an Organizational (Corporate) Strategy?
A corporate level strategy focuses on high-level decisions that affect the market in which the company competes,. It may also regard what the company stands for and how it will be perceived by stakeholders and third parties.
Organizational Strategies are generally broken down into:
What is a Competitive Strategy?
A competitive strategy focuses on how a business unit will compete against competitors within the market. Implementing a business unit’s competitive strategy should further the organization-level strategy.
The primary understanding of competitive strategies comes from Michael Porter’s Generic Strategies, which include Cost-Based Strategy, Differentiation Strategy, and Focus Strategy.
The objective of a competitive strategy is to establish some form of competitive advantage within the market. The primary tool for measuring the competitive position of an organization in the market is Porter’s 5 Forces Model. This model identified: New Entrants, Substitutes, Buyer Power, Supplier Power, and the Current Rivalry in the market.
What is a Functional Strategy?
A function strategy concerns how an operational division will achieve its objectives. Carrying out a functional Strategy is in support of a business unit’s competitive strategy through maximizing resource productivity. It focuses on developing competence in pursuit of a competitive advantage
What is an Operating Strategy?
These are concerned with how the component parts of an organization deliver effectively the corporate, business and functional-level strategies in terms of resources, processes and people. They are at departmental level and set periodic short-term targets for accomplishment.