Question

Discuss the different levels of strategy from corporate level to the business unit level.

Discuss why there is potential for disconnect from the home office to the individual organization.

Answer 1

Corporate Level Strategy:- Corporate level strategy defines the direction which the organization wants to pursue to achieve organizational objections. It involves the highest level of decision making. The top-level management defines strategies to be executed across all business units.

Types of Corporate-Level Strategies

1. Growth Driven:- The plan to start a new product line or expand the current line-up is decided by the top level management while discussing corporate level strategy. Such strategies also involve targeting a market segment or entering a new market with a new or an old product.
2. Redefining Direction:- It’s important to redefine the direction and vision of the organization to make it relevant in the competitive business environment. SWOT analysis is also done to counter any weaknesses that might affect the overall performance of the organization
3. Sustained Stability:- The organization which is stable in terms of finances, manpower, and resources has better chances of maintaining status quo and becomes the market leaders of their product and services. With the ever-changing business environment which sometimes leads to slow growth or no growth situations, such strategies are designed to tackle such uncertainties.

Business Level Strategy:- Business level strategies are those strategies which determine the plan and blueprint of how business units should compete with its competitors in a defined marketplace. Business units coordinate with the corporate team to allocate resources to operational level to achieve organizational goals.

Types of Business Level Strategies

1. Defining Market Segment:- Focusing on a particular market segment in order to increase sales and revenue generation for the organization
2. Product Differentiation: - Using the unique selling points of its product like features and specifications to differentiate from its competitors
3. Cost Management:- Following the most efficient processes to reduce the cost and attain competitive prices for its product and services

The disconnect between the home office and corporate office

Communication:- Coordination between the home office and individual organization depends on the type of communication, the frequency, and simplification of communication process which is key. A misunderstanding or lack of communication could lead to a business decision which may cause heavy losses to the organization.

Change management:- Top level management needs to have a game plan to help business units undergo a change in a smooth manner so that the performance is not affected in any way. It is a challenging task since each business units have their own external ecosystem which may be different from what others have.