What are the types of business strategy? A functional strategy refers to how a functional division of a company will achieve its objectives. Implementing a functional strategy supports the competitive strategy of a business unit by maximizing resource productivity. It focuses on developing competition in search of a competitive advantage. The main functional areas include marketing, accounting, finance, operations), research and development, and human resources.
The functional strategy will revolve around the key people in the functional area and will focus on key operational aspects of the value chain, such as productivity, pricing, logistics, profitability, efficiency, product design, product image and brand, product life cycle, etc. While often included within a functional strategy, an operational strategy refers to how the components (operating divisions) of a organization effectively offer strategies at the corporate level, business and functional in terms of resources, processes and people. They are at the departmental level and set regular short-term compliance goals. Strategic alternatives are long-term plans that companies develop to set their direction.
When establishing the direction of the organization, the availability of human and organizational resources will be taken into account and the objectives will be set based on the availability of resources. In general, analysis methods such as SWOT will be used to build an organization's strategic alternatives. Once the strengths, weaknesses, opportunities and threats have been analyzed, the organization can decide what options it has to create the strategic plan that best suits the organization's success. In general, strategic alternatives are not established when an organization performs well.
If an organization is not functioning well and if the management of the organization decides that it is best to restructure the organization, they look for strategic alternatives. A strategy is a broad concept of any organization and can be used in different ways. There are four main types of strategic alternatives that can be identified. Corporate level strategy can be defined as the organization's long-term goals and objectives that can create an impact on all business units operating under an umbrella organization.
If the company is a large group of companies with several sub-organizations dependent on the parent company, strategies at the corporate level are developed for the long-term benefit of the entire suborganization. The strategy at the corporate level provides a set of strategic alternatives among which the management of the organization decides to continue and achieve long-term results through the operations of companies in various sectors of the market and, possibly, in several sectors. The business-level strategy is a unit-level strategy created by the top management of the business unit. This focuses on increasing the strength of the competitive position of the product or service offered by the company and, at the same time, aligning strategies with strategies at the corporate level.
Some functional strategies are also called departmental strategies, since the functions are usually related to each department of the organization. Functional-level strategies focus on developing the organization's competence and, at the same time, provide the necessary support to the business-level strategy to achieve success in competition. These identified strategic alternatives help a company to align its activities with the organization's vision and mission.