The three levels of strategy for a company are• Corporate,• Business and• Functional.
You are watching: The growth, stability, and defensive strategies are common
1 Corporate strategy focuses on determining which businesses the company should be in. Corporate level strategy fundamentally is concerned with selection of businesses in which your company should compete and with development and coordination of that portfolio of businesses.
Corporation Level Strategy is concerned with 3 strategy:
Growth StrategyStability StrategyDefensive Strategy
1.1 Growth Strategy
There are six Growth path to Business:
Concentration to BusinessConcentricConglomerate to BusinessIntegration StrategyMerger and Acquisition Joint Venture
If you’ve exhausted all steps along the Intensive Growth Strategy path, you can then consider growth through acquisition or Integrative Growth Strategies. The problem is that some 75 percent of all acquisitions fail to deliver on the value or efficiencies that were predicted for them. In some cases, a merger can end in total disaster, as in the case of the AOL-Time Warner deal. Nevertheless, there are three viable alternatives when it comes to an implementing an Integrative Growth Strategy. They are:
1.2 Stability Strategy
Stability strategy implies continuing the current activities of the firm without any significant change in direction. If the environment is unstable and the firm is doing well, then it may believe that it is better to make no changes. A firm is said to be following a stability strategy if it is satisfied with the same consumer groups and maintaining the same market share, satisfied with incremental improvements of functional performance and the management does not want to take any risks that might be associated with expansion or growth.
In other words, a firm is said to follow stability/ consolidation strategy if:
It decides to serve the same markets with the same products;It continues to pursue the same objectives with a strategic thrust on incremental improvement of functional performances; andIt concentrates its resources in a narrow product-market sphere for developing a meaningful competitive advantage.
1.3 Defensive strategies
Defensive strategies are management tools that can be used to fend off an attack from a potential competitor. Think of it as a battleground: You have to protect your share of the market in order to keep in order to keep your customers happy and your profits stable. Defending your business strategically is about knowing the market you’re best equipped to operate in and about knowing when to widen your appeal to enter into new markets. In contrast to offensive strategies — which are aimed to attack your market competition — defensive strategies are about holding onto what you have and about using your competitive advantage to keep competitors at bay.
There are two approaches to defensive strategy in strategic management.
The first approach is aimed at blocking competitors who are attempting to take over part of your business’s market share. Cutting the price of your products, adding incentives or discounts to encourage customers to buy from you or increasing your advertising and marketing campaigns are the best common ways of going about this.The second approach is more passive. Here, you announce new product innovations, plan a company expansion by opening a new chain or reconnect with old customers to encourage them to buy from you. This is still a method to prevent the competition from taking away your customers and earning, but it is done in a more relaxed and less-aggressive manner, whereas the first approach is active and direct.
2 Business strategy develops competitive advantages within a business’s segment.
A strategic business unit may be any profit center that can be planned independently from the other business units of your corporation. At the business unit level, the strategic issues are about both practical coordination of operating units and about developing and sustaining a competitive advantage for the products and services that are produced.
In this strategy, the organization looks on three paths:
Cost Leadership strategyDifferentiation StrategyFocus Strategy
3 Functional Strategy of your organization is the level of the operating divisions and departments.
Functional strategy operates at the level of marketing, operations and finance to ensure that each part of the company has strategies to support the business. For single-business companies, corporate strategy consists of continuously evaluating the benefits of remaining in a single business versus becoming active in complementary industries.
In Functional Level Strategy, the organization look on:
Marketing strategy (4 P)Financial Strategy (Sources of Finance)R & D strategy (technological leader, innovation)Operation strategy (production Strategy)
The strategic issues at the functional level are related to functional business processes and value chain. Functional level strategies in R&D, operations, manufacturing, marketing, finance, and human resources involve the development and coordination of resources through which business unit level strategies can be executed effectively and efficiently.
Functional units of your organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on customer feedback or on resources and capabilities on which the higher level strategies can be based. Once the higher level strategy or strategic intent is developed, the functional units translate them into discrete action plans that each department or division must accomplish for the strategy to succeed.