Levels of Strategy

SWOT Analysis &Levels of Strategy HomeworkRichview Mission StatementsWhat are some common themes?SWOT AnalysisStarbucks New Brewhttp://www.cbsnews.com/videos/starbucks-new-everyday-brew/

Lets do a SWOT Analysis as a class

SWOT AnalysisHudsons Bay ExampleFrom Fur to Fendi

The 3 Levels of Strategy:Corporate Level StrategyBusiness-Unit Level StrategyFunctional Level Strategy

Corporate Level StrategyHighest level of decision makingDeals with the overall objective of the firmForms the trunk of the strategic decision tree Market you should compete in Less concrete more value oriented Corporate level strategy is concerned with:

1.Reach 4.Management Practices 2.Competitive Contact 3.Managing Activities and Business interrelationships Corporate LevelNew York KnicksOwner : James DolanBusinessman, Entrepreneur, Executive Chairman The Madison Square Garden CompanyMission : To Make Money

Fast FiveCorporate Level: Chris MorganScript writer of the film Fast FiveWriter and Producer

Business-Unit Level Second level of the pyramid. Businesses levels strategies are to secure businesses (themselves) an identity and position in the market. Business level goals are: Increase the business value for the corporate and stakeholders. Increase the brand awareness and value perceived by the customers.Business LevelNew York KnicksGeneral manager Steve MillsOversees all Basketball Operations

Fast FiveBusiness Level:Amanda LewisExecutive Producer who manages finances and ensures people are being paid

Strategic Business UnitA Strategic Business Unit (SBU) is a major business area that operates with some autonomy. Focused towards a set of products and are responsible for every strategyto be taken for those particular products.

Example: Apples iTunes!

iTunes doesn't just, it is a gateway to the iTunes Store where people can purchase music, purchase eBooks, and download applications. It also runs on Windows, so you dont need to own an Apple device to use it, reaches out to different customers. Although iTunes is free, it has generated billions of dollars in revenue.

Functional level This is the third (bottom level) and final level of the pyramid. Also known as Operational Level Level of the operating divisions and departments. Primarily concerned with successfully implementing the strategic decisions made at pervious levels. This level of strategy is extremely significant in shaping the success of other strategies. 15Functional LevelNew York KnicksHead Coach Mike WoodsonTo draft/acquire players, to win games, to get fans to attend games

Fast FiveFunctional Level: Justin LinDirector makes the movieWriter, Producer, Director

Advantages & Disadvantages A firm that successfully implements all 3 business-level strategies should be in a better position to:

Adapt quickly to any new environmental changes Learn new skills and technologies more quickly Effectively leverage its core competencies while competing against its rivals

Successfully implementing the strategies will also lead to above-average returns for the firm.

Business-level strategies require the organization to always remain vigilant regarding the needs of customers and the potential encroachment of competition. Todays highly competitive market can often fail companies to do so and lead them to:

Lose sight in changing customers tastes. Be easily imitated by rival competition Frequently reduce/raise pricing on products

In order to avoid these disadvantages, a business should always remain up-to-date with new technologies to retain the current customer base and work towards reaching new customers as well. Interconnection All strategies have to be in complete harmonization with each other since the success of one level is inseparably linked to the other. The impact of the node on the others is judged by the flexibility of their relationship which further depends upon the success of the adopted business framework.

19SummaryEach level of strategy is a chainCorporate : Covers full enterpriseBusiness : Covers the (SBU)Strategic Business Unit (SBU) : One division of a businessFunctional : Covers a specific area of operations in a division