Introduction
The concept of strategy can be elusive, with varying definitions. Some view it as an analysis of the present and anticipation of future changes, while others see it as an organic evolution of plans. Gerry Johnson and Kevan Scholes emphasize strategy as determining an organization’s direction and scope over the long term, focusing on resource configuration to meet market needs. Michael Porter underscores the importance of strategy in defining an organization’s unique position and creating competitive advantage through the combination of resources, skills, and competencies.
Corporate Strategy
- Definition: Corporate strategy encompasses an organisation’s overall approach with multiple business units in various markets. It addresses how the corporation collectively enhances the value of its constituent business units.
- Objective: Determine how the various components of the business create more value together than they would individually.
- Tools: Porter’s Generic Strategies, Boston Matrix, ADL Matrix, and VRIO Analysis assist in high-level analysis and planning.
- Factors: Internal competencies, team relationships, organizational values, shared resources, capital raising, and corporate branding are vital considerations.
Business Unit Strategy
- Definition: Business unit strategy focuses on achieving success within individual markets and is aligned with the objectives set in the corporate-level strategy.
- Objective: Address the question, “How do we win in this market?”
- Tools: Competitive analysis, core competency assessment, USP Analysis, Porter’s Five Forces, and SWOT Analysis are instrumental in developing a robust business unit strategy.
- Factors: Core competencies and customer-centric approach, exploring new opportunities, and clearly articulating the unit’s mission, vision, and values.
Team Strategy
- Definition: Team strategy is critical for the execution of higher-level strategies. It ensures that teams throughout the organization work cohesively towards common objectives.
- Objective: Align the efforts of teams with the business unit and corporate strategies to drive organizational success.
- Implementation: Define team purpose and boundaries, employ Management by Objectives and key performance indicators, and optimize supplier management, quality, and operational excellence.
Conclusion
Understanding strategy at different organizational levels is essential for cohesive and effective planning. Corporate strategy defines the collective approach of an organization, business unit strategy focuses on individual market success, and team strategy ensures alignment with higher-level objectives. Organisations can navigate complexity and drive sustainable success by applying appropriate tools and techniques. Ultimately, a well-defined strategy sets the course for an organization’s journey towards its goals.