marketing business level strategy

Crazy Egg also offers recordings, A/B testing, and more to help ensure your website is offering the best user experience.

Pricing : Basic, $24/month; Standard, $49/month; Plus, $99/month; Pro, $249/month; Enterprise, contact for pricing.

5. Review your media.

Decide what you already have in your arsenal that can help you create your strategy. To streamline this process, think of your assets in three categories – paid, owned, and earned media.

• Paid media means any channel you spend money on to attract your target audience. This includes offline channels like television, direct mail, and billboard to online channels like social media, search engines, and websites.
• Owned Media refers to any of the media your marketing team has to create: pictures, videos, podcasts, ebooks, infographics, etc.
• Earned media is another way to say user-generated content . Shares on social media, tweets about your business, and photos posted on Instagram mentioning your brand are all examples of earned media.

Gather your materials in each media type and consolidate them in one location to have a clear vision of what you have and how you can integrate them to maximize your strategy.

For example, if you already have a blog that's rolling out weekly content in your niche (owned media), you might consider promoting your blog posts on Twitter (paid media), which customers might then reTweet (earned media). Ultimately, that will help you create a better, more well-rounded marketing strategy.

If you have resources that don't fit into your goals, nix them. This is a great time to clean house and identify gaps in your materials.

6. Audit and plan media campaigns.

Cleaning house segues straight into this step. Now, you must decide which content is going to help you.

Focus on your owned media and marketing goals. For instance, will updating the CTAs at the end of your blog posts help you increase RSVPs to your event?

Next, look at your buyer personas. Let's say you work for a video editing software company. If one of your persona's challenges is adding clean sound effects to their videos but you don't have any content that reflects that, make a 15-second demo video for Instagram to show how great your product is at solving that challenge.

Finally, create a content creation plan. The plan should include topic clusters, goals, format, and channel for each piece of content. Be sure to include which challenge it's solving for your buyer persona.

For ideas on content creation or a more in-depth look at how to create a content plan, check out our post, The Ultimate Guide to Content Creation .

7. Bring it to fruition.

At this point, your market research and planning should help you visualize how your strategy will be executed – and by which teams.

The final step is to bring that all together and assign actions to your plans.

Create a document that maps out the steps you need to take to execute your campaign. In other words, define your strategy.

Think long-term when creating this document. A standard strategy document is 12 months. This structured timeline should be the home base for your strategic marketing efforts.

To paint an example, let's go back to the video software company.

Maybe in January, you will launch a software update that improves the exportation process for users. In April, you want to publish an ebook that explains editing terms to your buyer personas, and in September, you plan to launch an integration with other software.

Remember, your digital strategy is unique to your business, so the document should be as well. As long as the strategy includes the pertinent details outlined in previous sections, you'll be set.

Now that we've explored the critical steps of a complete marketing strategy, let's look at some "Why didn't I think of that?" strategies to inspire your own.

1. Regal Movies

Digital strategy: owned media.

Regal Movies took the Halloween spirit to a new level, even renaming its Twitter account to reflect the spirit of the season. This "Monster Madness" poll is a fun, interactive way to get followers invested in Regal's content:

In this case, the consumer is praising the brand’s product. Doesn’t get better than a fantastic review like that.

3. Small Girls PR

Digital strategy: event marketing.

Wait, is that Keke Palmer?

Small Girls PR is a boutique PR company based in New York, and one of the company's talents is throwing amazing events for their clients, like Olay. This event recap carousel on Instagram is an effective event marketing example, as it boosts awareness for your brand and offers social proof by featuring a public figure.

4. Superside

Digital strategy: paid media.

Design agency Superside launched an Instagram ad to promote a lead magnet: Their digital ad design guide. While the brand may have created the guide specifically for paid promotions, it’s also possible that they repurposed a high-performing blog post into a downloadable ebook.

Don't forget to share this post!

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5 Marketing Trends That Might Not Survive in 2023 [HubSpot Research]

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What is a Marketing Plan & How to Write One [+Examples]

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Outline your company's marketing strategy in one simple, coherent plan.

What is Business Level Strategy? Definition, Types, Examples

Tactical and strategic planning is crucial to the success of your business model. Every company needs it to experience real growth across all key areas and to be prepared for different business cycles . Discover and integrate modern business tactics into its corporate strategy.

Incorporating a business-level strategy, the middle layer in the overall strategy hierarchy, enhances the productivity of your company’s department. It leads to market expansion and better use of business resources.

This guide will cover the A-Z of business-level strategy, including how to implement a business-level strategy.

What is a Business Level Strategy?

The primary business level strategy definition is the strategic planning and implementation processes incorporated by successful businesses in their niche market. 

Your choice of business-level strategy is configured to gain a competitive advantage, improve customer satisfaction, and maintain above-average returns. 

Most organizations that operate one business often combine their business-level strategy with the corporate-level system to devise a single level of the process. 

An effective business-level strategy adequately defines a business's goals and policy standpoint to deliver customer value and gain a tremendous competitive advantage over competitors by using the business's core competencies. 

Adopting the right business strategy for your business cannot be overemphasized. It determines the company's direction, defines how it serves its customers, and helps the company establish its brand. 

A business can have a corporate-level strategy, a business-level strategy, or a functional-level strategy, depending on the business's organizational structure. In an organization having multiple business units, each unit is a strategic business unit ( SBU ). 

Creating a business-level strategy is the best way to bridge the gap between your hyper-specific functional strategy and the more general corporate strategy. 

The main difference between business and corporate level strategies is that the former is more focused. 

Compared to the corporate strategy level, business-level strategists can develop a more detailed and accurate description of their customers than at the corporate strategy level.

Types of Business Level Strategies

There is no best generic strategy for your business. The best business strategy for you depends on two factors: your customers and competitors.

Although you can incorporate different business-level strategies into your business to give it the needed competitive advantage, some of them stand out.

Here are the main business-level strategies available for you to choose from.

1. Cost-Leadership Business Level Strategy

A cost-leadership business strategy allows businesses to increase their overall efficiency by reducing operational costs. It will enable companies to charge lower prices for their products than their competitors.

With consumers being more aware of their choices than ever before and constantly looking to increase their purchasing power, the onus is on you to use an effective price strategy that distinguishes you in the market and can not be turned down. 

There are two main cost-leadership business-level strategy types: broad cost leadership and focused cost leadership. What differentiates them is that the broad cost leadership’s competitive scope is broad in target, while that of focused cost leadership is narrow and focused.

Cost leadership strategy is best suited for businesses capable of lowering their operational costs low enough to post profit margins while outpricing their competition. Businesses offering a lower price than their competitors can use this strategy.

2. Differentiation Business Level Strategy

A differentiation strategy provides a product or service with differentiated features compared to competitors.

Differentiation strategy is characterized by innovation. You must conduct extensive market research , identify exploitable gaps in the market, and tailor your business to offer a product or service that bridges that gap or improves an existing product or service. 

This business-level strategy is best suited for any business or industry. A wide range of companies uses it to compete for market share as long as they can identify gaps in the market that need to be filled. 

3. Focused Differentiation Business Level Strategy

A focused differentiation business strategy targets a specific and narrow segment of customers . It offers them differentiated products with unique features tailored to the target customers.

The former’s focus on a very narrow segment of the market is what separates the focused differentiation business level strategy from the general differentiation strategy.

Focused differentiation is best suited for markets where understanding product comparison is critical. New businesses find competing with companies using a robust differentiation business strategy challenging. 

This strategy is effective for businesses that have identified a niche in the market to tailor their products or services. Focusing on a target audience ensures new businesses can get significant demand for their products or services. 

4. Focused Low-Cost Business Level Strategy

The focused low-cost business strategy only focuses on a small niche of customers and comes at a lower cost than a strong strategy. It is best to tailor your focus to a particular niche for businesses that do not seem to appeal to the broader market.

By offering the lowest cost provider in your market niche, your business tends to stand out against a wide range of competitors.

A focused low-cost strategy is best suited for businesses with many competitors. Despite the low cost, they are not market strong, or only a small market segment of specific customers can generate the required revenue for your business.

5. Integrated Low Cost/Differentiation Strategy

Businesses employ an integrated low-cost or differentiation strategy with differentiated products offered to customers at a lower cost than competitors. 

As a hybrid business strategy, the integrated strategy is quickly gaining ground brought about by increasing global competition. 

The benefit that companies that choose this hybrid business level strategy have over those that rely on a single system is that by integrating these two business level strategies, you position yourself better to adapt to quicker environmental changes. 

You can use flexible manufacturing systems to maintain superior quality in the product development process while reducing operating expenses.

This hybrid business level strategy is best suited for businesses that operate in a market niche where the buyer's needs and preferences are entirely different from the rest of the current market. 

How to Implement a Business-Level Strategy

You need to identify and implement your business objectives in a way that will offer numerous benefits to your business to implement a business-level strategy successfully.

Apart from identifying your goals, you need to have a detailed plan to help your business achieve all of its highlighted goals. 

Here is a list of steps to successfully implement a business-level strategy for your business.

1. Identify Target Market and Consumers

The first step in implementing a successful business-level strategy is identifying all relevant target markets and consumers. 

Before successfully implementing the needed changes to your business organization, you need to spell out the market you are seeking to penetrate and the ideal business’s customers to which the market will likely open your business. 

Consider your competitors that have already experienced significant success in that same market you are about to venture in, their average pricing, the target market, and customers that patronize their products and services. 

2. Find Out the Needs of Your Identified Market 

Your competitor's sales should closely guide the needs of your customer base. You need to identify your customer's particular needs and then relate them to the products and services you hope to offer.

Consider the price standpoint of your customer and build your product price around the average price a large majority of your customer base can afford. 

3. Find Effective Ways of Catering to Your Customer's Needs 

Figure out ways to address your highlighted needs. You need to go back to the table with your company executives and build strategies, including where to seek vendors, getting your products to the desired target, and making them within reach of your customers.

Pick a fair price for your product or service that is favorable to the business and your customer base, as you already have established competitors. 

4. Compare Your Business Level Strategies with Competitor's Strategies

Considered the business level strategy your competitors employ that still enables them to post massive profit margins. 

Most businesses use cost savings as an effective business-level strategy to return large sums of profits and build brand loyalty. 

This strategy is of great help if you are looking for how your competitors' business model is geared at improving and adapting to evolving changes in the narrow market segment. 

5. Set Common Goals with the Company's Goals

Your goals must be met by all stakeholders of the company and the company as a whole. 

Devise a plan for company-wide goals that positions you to consolidate and strengthen your potential within the market. Your business should leverage core competencies to create value that satisfies customers.

Business goals should be specific and should be attainable. You are in constant competition; your goals must be geared towards that solid fact. Successful businesses use the SMART goal framework to set their business and financial goals . 

6. Set Unique Goals for your Departments

Individual department goals help the business better segment responsibilities that play a massive role in ensuring the success of the overall company's goals. 

Constant communication must be maintained among all quarters of your organization, especially between the corporate level and the employees, to generate the result required and translate into the success of department-assigned tasks. 

7. Complete Routine Checks at Each Company Level

Schedule monthly checks that help track your level of progress and ensure you are not diverting from the organization's set goals and objectives.    

Your monthly review is done on the corporate level to give room for relevant information to be disseminated down the corporate ladder from department heads to individual department members.

Examples of Business Level Strategies

A breakdown of business-level strategy examples and their application is a good way of understanding how business-level strategy differs from other strategy levels. 

The ideal business-level strategy is the one that helps reduce costs and increase return on investment ( ROI ).

Popular business-level strategy examples to aid your understanding include

1. Cost Leadership

An example of business-level strategy businesses employs under cost leadership is offering a product or service at the lowest cost attainable to competitors to gain a considerable market share. 

Businesses strive for cost reduction by improving or constructing new and adequate facilities, investing in tools and equipment, and reducing the overhead and administrative expenses of the company. 

Cost leaders are companies that are the cheapest manufacturers of a product and providers of a service. 

One common misconception about this strategy is that profit margins are lower. You can use rigid cost controls and better facilities for mass-producing products at scale to drive costs and increase your profit margins. 

With a focused cost leadership strategy, businesses compete on price with their competitors but focus on a niche market. This strategy helps you better understand your customers’ needs and serve them better. 

2. Differentiation

In the case of differentiation, instead of reducing the business operational cost and diverting the money saved to customers, differentiation strategies focus on developing and marketing products to offer customers the most significant value. 

There are two forms of differentiation strategy: broad and focused differentiation strategies. What differentiates them is that a broad differentiation strategy focuses on a vast range of customers while a focused differentiation strategy focuses on a smaller number of customers.

The Apple brand, which has created a niche in the smartphone market, is a perfect example. Apple invested heavily in customer service, research and development, and marketing, allowing it to charge a premium price without affecting its market share.

3. Focused Low Cost

Apart from reducing costs from their operations, businesses decide to tailor and divert all their focus and attention to a particular market subset for maximal value as their business-level strategy. 

Consider a business that produces and sells manufacturing tools. This business can focus its tool manufacturing strictly on the professional tradesperson market. 

4. Focused Differentiation Strategy

This business-level strategy involves a business choosing to differentiate itself from its competitors while focusing a large chunk of its efforts on a smaller subset of its customer market. 

The idea behind a focused strategy is that with a smaller target market comes the ability to better understand the business customer base and their needs and successfully deliver the value the customers need. 

An example of the focused differentiation strategy is the automobile company Rolls Royce which focuses on offering premium-priced cars for a sub-niche of the global car market.

5. Integrated Low Cost/Differentiation

A hybrid strategy that combines low-cost and differentiation techniques is the most effective approach for several businesses.

The premium fast food restaurant industry is a business venture that utilizes the integrated low-cost/ differentiation strategy to near perfection. 

They offer low prices that characterize established food chains and a differentiated range of offerings that take them a step higher than most fast food chains.

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Anastasia belyh.

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.

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Strategy Planning

The 3 Levels of Strategy: The Difference & How to Apply Them

by Cascade Team, on Sep 3, 2022

Table of Contents

Every business leader should be familiar with the three levels of strategy. Like any business, strategy comes in various shapes and sizes. The strategy for a multi-national company will contrast with one from a startup.

Yet, the principles remain. To understand how strategies shift, we'll look at the existing strategy levels and how an organization can apply them.

Download our battle-tested strategic planning template that hundreds of organizations have used to jump-start your strategy development.

Ultimately, the biggest takeaway we hope you get from this post is that strategy is for everyone.

You don't have to wait until your business grows to a certain size to “get strategic.” Instead, be conscious of where you are as a business so you can develop your strategy in a way that fits and grows with your organization.

We'll discuss how the 3 strategy levels in an organization differ and provide some context on how to use these different levels of strategy in strategic management.

The 3 Levels of Strategy are:

Corporate level strategy.

• Business Level Strategy

Functional Level Strategy

No matter the level of strategy, "organizations that promote a transparency and collective culture when it comes to strategy, generate a stronger commitment and sense of accountability from their employees." This statement by Guillermo Hermosillo Cue, Global Innovation Director at Burger King in our state of strategy report echoes the importance of strategic communication regardless of the strategy level. 

Corporate strategies are the top-level of strategy in an organization.

The corporate strategy defines the organization’s overall direction and the high-level ideas of how to move towards it. These plans are usually created by a select strategy group such as the CEO and the top management.

Generally, this is the group involved because they have a deep understanding of the company and the strategic business knowledge needed to steer the organization in the right direction.

A corporate strategy is generally broader than the other strategy levels. Strategies at this level are more conceptual and futuristic than business and functional level strategies. They usually span a 3-5 year period.

A corporate strategic plan generally encompasses:

• The vision for the organization
• The company’s values
• The Strategic Focus areas
• The strategic objectives
• The most important KPIs

Why Create a Corporate Strategy?

In the corporate strategic plan, you’ll decide the markets you’ll compete in as an organization.

Then, it will direct the creation of business-unit-level and functional-level strategies.

These strategies, in turn, will guide the downstream decisions made by employees of all levels. Therefore, every decision made in the organization should directly or indirectly contribute to the strategy's corporate objectives. If it’s not clear yet:

Every organization needs a corporate strategy .

There is no such thing as a too-small organization nor a too-large one to define what they want to achieve and how they will do it.

We've used our own strategic planning and execution software to create our corporate strategic plan here at Cascade.

👉🏻 Grab your free corporate strategy template to follow a structured approach and create your corporate strategic plan. 

Business Strategy Level

The business-level strategy is the second tier in the strategy hierarchy.

Sitting under the corporate strategy, the business strategy is a means to achieve the goals of a specific business unit in the organization.

One thing to note, implementing this strategy level is only useful for organizations with multiple business units. An organization with multiple business units may sell products and services or may sell multiple products/services in different industries.

A business level strategy example

A large Bank is a prime example of an organization selling multiple services in different industries.

To name a few, it has business units in corporate banking, wealth management, risk management, and capital raising. Each of these business units would have distinct goals and a distinct business strategy to achieve these goals.

📚 Read more: The 7 Best Business Strategy Examples I've Ever Seen

Why middle managers should create the business level strategy

Strategies at the business level should be constructed by the heads of business units and other middle managers within each unit.

It’s important to include a range of managers from each unit to participate in the strategy process because:

• It increases buy-in: Managers who've had a chance to contribute to the strategies creation feel included in the decision making. Therefore, they’re more likely to accept the strategy and jump on board with its execution.
• It improves ownership: Employees who are given the opportunity to contribute to the formation of the strategy are more likely to take ownership over its completion.

If your organization only has one business unit, you don't need to worry about this strategy level - and can skip to the functional strategy level.

Here at Cascade, we only have one business unit, our strategic planning and execution software , so currently, we don't have a strategy at the business level.

Now let's say Cascade also developed a second type of software, for example, software for processing payments. We would then need to develop a business-level strategy to allow the two business types to grow alongside each other.

👉🏻 Grab your free business strategy template to follow a structured approach and create your business strategic plan. 

This is the level at the operating end of an organization.

At the functional level of strategy , decisions made by employees are often described as tactical decisions. They are concerned with how the various functions of an organization contribute to the other strategy levels.

These functions can include marketing, finance, manufacturing, human resources, and more.

Functional strategy deals with a fairly restrictive plan. It gives the objectives for each specific function.

In simple terms, this is the strategy that will inform the day-to-day work of employees and will ultimately keep your organization moving in the right direction. The functional strategy level is probably the most important level of strategy.

This is because, without functional strategies, your organization can quickly lose traction and “get stuck” while competition moves forward.

Suppose you are a larger organization at this bottom strategy level. In that case, you start to think about how the various departments will contribute to your growth and how they will work together, keeping in mind your corporate strategy.

Your marketing strategy, finance, IT, operations , and other departments all have goals and responsibilities to deliver. Having a visible functional level of strategy that aligns back to the overall corporate strategy will increase the chances of success.

Functional level business strategy for a smaller organization

For a smaller organization, having a functional level is crucial.

If you're one or two people, you may end up wearing more than one “functional hat.” Or, you may not have the various functions clearly defined - but they are still present.

So, you might not have a 'marketing team', but there are still marketing activities that need to be done. You may not have a 'finance team', but your organization still has bills that need to be paid and checks to be collected.

In Cascade , we can create multiple plans within our software. We've created a strategic plan for each function in the organization, which links back to our main corporate plan to ensure everything is moving in the right direction.

"A journey of a thousand miles begins with one step,” as the saying goes.

Developing a functional-level strategy will ensure that your organization's steps are the right ones. As we mentioned earlier, the key takeaway here is that strategy is for everyone, no matter the stage of your business idea or organization.

Looking for a structured approach to your strategy and planning? These strategy planning templates will help you streamline strategic planning and execution at each level of your organization. 

The three levels of strategy are the first step

Of course, having a good (or great) strategy isn’t guaranteed success.

But it's definitely the place to start in order to succeed. Understanding the levels of strategy is a big part of getting the creation right. However, with increased levels, there can be increased confusion.

Our dedicated strategy software, Cascade, will allow you to build your corporate plan, then create plans at the business and functional levels with ease. Cascade makes it super easy to align projects and collaborate across plans and departments.

Try it for FREE and see how you can go from simply writing your plan somewhere static to a more dynamic space that you can share with everyone in your organization - it makes all the difference!

Get more insights into all things strategy

Related posts to get you reading, what is corporate strategy.

Business level strategies are concerned specifically with  the strategic planning and execution of initiatives for a specific business. Business...

The further down from the top you go, the less familiar your teams are with strategy and how it is executed on a regular basis. 

Join thousands of teams turning their visions into reality.

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What is Business Level Strategy? A complete guide for beginners

• Author Author: tu Twitter

The business-level strategy is often considered as the middle man in the level of an overall strategy hierarchy. It is often included in the strategic planning and execution of initiatives for a particular business. In terms of strategy levels, people have meaningful ways to divide up that enables you to tell apart between the multiple parties and responsibilities included in both the strategy's formulation and execution.

So, which kind of strategy have you adopted for your business? Did you have the right one?

Yes, there are many different kinds of business-level strategies. Also, if you want to get an edge over your competition, you will need a business-level strategy for long-term success. So, in my today What is business-level strategy? A complete guide for beginners , I will walk through all the key factors of strategy at a business level and 5 typical kinds of a strategic plan for your business and a lot of useful information. Let's dive in!

What is business level strategy?

In the simplest meaning, business level strategy can be understood as an elaborate outline that incorporates the strategic planning and policies, goals, and actions that focus on is the matter of how to create and deliver value to customers while keeping up a competitive advantage. The executed activities in the business level strategy lie in the aim to get advantage and generate customer value in the specific market that your business unit now operates in. That's why recognizable organizations will often compound business strategy with corporate strategy in a form of a single strategy level.

With the business level strategy, you will be able to define your position in your industry and the direction of your profits as well. Also, business level strategy can influence the efficiency of how you can give out your customer base. To gain the best approach, this will need to integrate some kinds of business level strategy.

However, you must figure out several things to determine how you will implement these strategies:

• Are you targeting a broad-range or niche market?
• What are your resources?
• What is it that your target customers value the most? (For example, cost savings, brand prestige, product quality, and so on.)
• What can make you distinct from the competition?
• Does your business have the ability to lead and preserve itself in the marketplace regarding product quality and battling pricing?

There is a way to help you get perspective, that is putting yourself in your customer's position. For example, while you are shopping for clothing, consider which brands do you buy from? Also, ask how do you rank the importance of the pricing, material, and manufacturing quality, environmental impacts, brand identity, and many more? Subsequently, you will need to compare this perspective to that of your target customers' and check how it aligns with your marketing inventiveness as well as business resources. Finally, when you are done, you'll be capable of figuring out the most effective business-level strategy.

Explore other topics:

• What Are Business Growth Strategies?
• Market development strategy
• Product Strategy Guide
• What is an Internal Analysis?

The key factors for business level strategy

So, I assume that you now have a quick understanding of what is a business strategy, but what about the actual content of your strategy? Depending on your organizations, there are 2 key factors that you will need your business level strategy to address:

Core Competencies

When the singular nature of business level strategy becomes more restricted, the concept of a business's core competencies now plays a very important role. The core competencies now are the components of a business which is different from those in the market and can offer value to customers.

When you can understand the core competencies of a business, and also examine the manner in which these competencies can be evolved or leveraged into a real-world competitive benefit in a market is a huge part of the business-level strategy. In case you are still struggling to generate a competitive advantage or identify your business's core competencies, you can use the VRIO analysis as a good place to start.

Not only understanding a business's core competencies, but you also have to concern the nature of the customers (both current and potential) in business level strategy that interacts with the business. Using the words who, what, and how can help you a lot in developing this understanding.

Who are your customers? When you ask yourself this question, then you will have to determine the demographic descriptors and the consumption patterns to draw a picture of who your customers are. This is unlike working at the corporate strategy level where business level strategists are often capable of developing a very precise and detailed idea of who their customers are. This enables us to make suitable strategic planning decisions in a way that might seem infeasible at a corporate level.

What products do your customers need? As you can understand what a business's customers need and want now, it is vital to finish developing and maintaining a competitive advantage step. For those companies that complete the needs and create value for customers are normally successful businesses. Additionally, they will have the ability to precisely predict the changes in customer needs over time and predict the fluctuations in demand, enabling businesses to react in strategic terms.

How can customer needs be satisfied by your business? Last but not least, this is for asking what your organizations need to do to figure out how to leverage core competencies and resources in a manner that pleases customers - creating value.

Why you should implement the business level strategy

If you are searching for a way to bridge the gap between your more general corporate strategy and your hyper-specific functional strategy, creating a business level strategy between the two is absolutely a brilliant solution.

Believe me, understanding and implementing business-level strategy, then you will be capable of:

• Having your goals structures and fulfilling maximum impact.
• Aligning your objectives from below upward.
• Bridging the gap between the popular corporate targets that lead your business and the specific and functional strategies that achieve these goals.

Additionally, when you incorporate business level strategies, you will be able to give the managers in your business a better comprehension of how their work (and the work of their teams) affects your organization's final goals. Finally, when everyone is captivating to follow the same direction, it will help you to solve the task much easier for your business to succeed.

5 Types of business level strategy

1. cost leadership strategy.

Cost leadership strategy is about competing with a wide variety of businesses based on price. To be more specific, a cost leadership business-level strategy is a strategy that businesses use to push their efficiency, cut down the production costs to make it under the industry average, or the competition in the area. In a quick understanding, in this strategy, this business will charge lower prices for its items than others in the same industry to compete with them and to increase their purchasing power.

In order to apply cost leadership to businesses, a single business can cut down the final cost of their product or service by lowering costs elsewhere in the business. For instance, you can buy on a large scale to have small production costs, have few middlemen, fewer employees, and so on.

There are some common mechanisms to drive down costs, which are:

• Forming the rigid cost controls.
• Constructing state-of-the-art facilities to manufacture at large scale and a low cost at the same time.
• This strateg requires your product or service to be standardized, or at the same level of quality products or services compared to their competition.

There is a slight misconception about this strategy when they assume that returns would be lower. However, to maintain above-average returns and offer the lowest price, the company must continually concentrate the internal efficiencies. Also, this cost leadership would only work when you are able to lower your production costs enough to still make a profit at the final stage and outprice your competition. Hence, it can be best for larger corporations when they have the capabilities to purchase in larger quantities as well as lowering production costs. Meanwhile, it is not a smart choice for small stores and small chains and even elite brands such as Gucci or Apple.

In reality, there are two good examples of cost leadership business strategy, which are Wal-Mart and Costco. They are efficient and large scale business models that can get the lowest pricing on products, allowing them to sell them more affordable prices than other vendors.

2. Differentiation strategy

Differentiation strategy is about utilizing a product or service with completely unique features when comparing against the competition. Your brand will try to turn your product or service really outstanding from the crowd, which can solve the problem that no one else has.

In order to do this, you must invest innovation and out of the box thinking. A company with this strategy often charge their customers more with a view to offsetting the cost of being unique. To implement this differentiation strategy, you will have to conduct the large-scale market research first to define a gap in the market that must be filled, or by enhancing an existing good or service.

In order to apply this differentiation strategy to businesses, you can simply take a product or business and choose to improve it or make it different from the competition. There are some common mechanisms to differentiate including:

• Superior quality.
• Customer service.
• Uniqueness.

Overall, differentiation is one of the main strategies that is used to compete for customers in their industry, which can be used by any industry or business. The trick here is to determine your customers' pain-points from your competitors and solve them. By executing this technique, your brand will be able to turn clients into fans by creating brand loyalty because people will share what you are doing if they love it. Additionally, marketing efforts can become easier for you as you can have a unique selling point to market your goods or service. In case you are the one who can create a product in high demand, you can charge an even higher price!

In the real world, there are many great examples of differentiation. Apple is a firm that is successfully operating a differentiation strategy to sell its laptops to a broad market when they have special design and engineering that enables them to stand out in the marketplace, and also charge a premium price but still can combat their competitors.

However, sometimes this technique could be bad as offering a distinct quality could make for high research and development costs. Also, if a product is too different or complicated to the consumer, they may refuse to use it. So consider that!

3. Focused differentiation strategy

There are some organizations not only competing through differentiation but also by choosing a small-scale portion of the market to concentrate on. A focused differentiation business strategy is about targeting a particular or small-scale group of clients with differentiated products. Basically, there must be some unique features in your product or service that meet a niche market's demands .

In order to implement focused differentiation for businesses, there are many ways to do it. You can focus on a particular sales channel, like selling online only. Also, you can focus on a demographic group, when you think about a hotel that provides many activities for children only. There are two common mechanisms to adopt a focused cost leadership strategy include:

• Highly focus on serving a small group of customers.
• You can uniquely cut down some costs to serve that market's needs if you do understand the needs of your smaller target market.

In some markets, where product comparison knowledge is crucial, like camping equipment, new stores could find it challenging to be competitors of firms implementing a focused differentiation business strategy.Overall, this type of strategy would be great for businesses that have already got a niche that they would like to produce more specialized products or services. Also, you must ensure you have done a lot of market research before diving in.

The benefits of a focused differentiation strategy are plenty. Firstly, you will be able to charge very higher prices than those simply just following the differentiation strategy because you also provide a unique experience/item/service. What is more, your competition will be limited when you are specialized in a very niche area. Plus, you will be able to create customer loyalty. For example, selling environmental products can build strong customer loyalty. In contrast, you must take some risks that limited demand could limit growth capabilities when your niche could withdraw or be outcompeted by larger competitors.

4. Focused low-cost strategy

Overall, in this type of strategy, your company will not only compete via price but also choosing a small portion of the market to concentrate on. You can see that this strategy is very similar to the differentiation strategy except that it is focused on a very narrow segment of the market as unique features were focused on aiming at the small market segment.

Businesses utilizing a focused differentiation strategy can defend themselves in the same way as businesses with a broad differentiation strategy. Rather than having low prices all around, you should pick and select products that have "common" prices and one specific one or two that's much lower. There are some common mechanisms that you should focus on, which are:

• Choosing a profitable tapering subset of the market.
• Paying attention to areas where competition is the weakest.
• Focusing on a segment where goods substitution is difficult.

If your business seems not to have the ability to appeal to a larger market, then you should focus on a niche. You may not be able to have low prices for all of your goods and/or services when you can try to be the lowest-cost provider in the market for that particular niche, which could help your business to be outstanding against the other competitors. This strategy can be so productive when there's a competition, but competitors are not strong or if a small or detailed segment of customers can create an outstanding difference in the revenues.

A good example of this strategy is the case of Rolls Royce cars utilizing a focused differentiation strategy. Their cars are identical to prestige, standard, and engineering excellence as they are premium priced and concentrate on a tiny subset of the global car market. The main advantages here in this strategy are the low cost in production, the ability to draw in a narrow market segment, and the increasing brand affinity when you only have a specialized product.

However, you should be aware of your niche's risk may be targeted by broad market firms with bigger economies of scale, and the future growth for your firm can be limited if you specialize too much.

5. Integrated low-cost differentiation strategy

This integrated low-cost differentiation strategy is where a business has unique products provided at a lower cost producing low-cost products with unique features. Their competitive advantage is about cost and differentiation. This one is also called a hybrid strategy and can be on the way to becoming more and more popular when global competition is growing. If you compare this type of strategy to companies that depend on a single strategy, those that integrate two may have the ability to position themselves to adapt much quicker to environmental changes.

This hybrid business-level strategy is profitable for businesses when it has a market niche where the buyer's needs and preferences are not like the rest of the current market. In case you want your business to be really outstanding, and have the workforce to focus on both differentiation, and low-cost production to keep the price low, then this strategy could be best for your business.

About the advantages, this strategy can be great for gaining customer loyalty when there's a huge value for clients both in the product and price. Your company will also have an adaptable business model for some kinds of environmental changes. At the same time, you will both have unique features and keep them relatively low-cost.

On the other hand, you might have neither be the lowest cost nor the most differentiated company, as well as the risk of being "stuck in the middle" as the company could lack the expertise that comes with straight to following either cost leadership or unique business strategy.

Air Arabia is a great hybrid business strategy example when the clever flight company provides quality services when it comes to consolation but provide an economic fare by simply cutting down on premium in-flight services.

Related posts:

• What is Niche Marketing?
• What is a Go To Market strategy?
• What is Penetration Pricing?
• 15+ Best B2B Lead Generation Strategies

There are a lot of different business strategies, for you to choose from and be able to implement the correct one depending on market conditions and your unique set of core competencies. Business-Level Strategy theory also states that you can focus mostly on three strategies you as an organization can use to win in the marketplace including cost leadership, focus, or differentiation.

Also, you will need to put yourself in your customer's shoes, deeply look at the market, and consider the core foundations of your business. I believe that you can effectively develop your strategy with this in mind. Great strategic planning can hugely influence on the outcome and your business' profits no matter how big or small.

That's all! I guess with the information above, there nothing challenges you with your practicing in Business Level Strategy. If there is any trouble occurring and something you want to know more, please let us know. You are always welcomed to share!

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Five customer engagement trends influencing 2023 marketing strategies.

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Raviteja Dodda (Ravi) is the cofounder and CEO of MoEngage , an insights-led customer engagement platform.

For marketers, 2023 is shaping up to be laser-focused on digital channels. Across the board, marketers are planning to increase their budgets on technology tools to remove barriers and get closer to their customers across multiple digital channels. Unsurprisingly, most marketers are divesting budgets allocated toward traditional advertising methods, such as television, radio and print, in favor of social media, mobile apps and producing owned content like videos and podcasts.

In this article, I will examine the key brand marketing takeaways of 2022, leaving marketers with five customer engagement trends that should have a significant impact on marketing strategies in 2023.

1. Clairvoyant Chatbots: Using AI To Predict Customer Behavior

We’ve already seen the excitement around the open-source chatbot ChatGPT kicking off the new year. AI-powered, generative chatbots will shape marketing strategies this year and beyond. Why? Due to open API architectures, AI-powered chatbots can be programmed to access brands’ customer data across the martech stack, enabling them to understand the pulse of customers based on their interactions with brands. Chatbots have had no choice but to advance to improve the customer experience.

As these tools become more sophisticated, expect to see more chatbot-driven voice interactions and omnichannel campaigns. Brands can leverage chatbots to analyze customer behavior and predict their next steps by looking at multiple touchpoints to improve customer experience. Chatbots use machine learning (ML) to adapt to changing customer expectations and provide individualized experiences cost-effectively.

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Best covid-19 travel insurance plans.

Brands have started using Facebook Messenger or live chat to automate easy payments using chatbots with built-in data security and information protection. Chatbots can use the information from this quick payment procedure to facilitate conversation-driven, cross-selling, and upselling. Chatbots can provide transaction details and payment confirmation, resulting in higher customer retention.

2. Metaverse Gets Real: AR And VR On The Rise

Influencer Marketing Hub predicts that virtual reality will have a compound annual growth rate of 15% by 2030 . 2023 could be the year we see it gain significant traction.

As the metaverse tries to blend augmented reality (AR), virtual reality (VR) and AI, a new 3-D immersive experience could blur the line between real and reel. Marketers must find ways to harness opportunities to create personalized experiences for customers that draw them in and encourage them to take action.

Multiple examples of blended experiences have set the stage for what’s to come. For instance, “gamevertising” is rising. NASCAR debuted its “ Next Gen Racecar ” on the popular gaming platform Roblox. AR is helping customers “try on” their favorite products from 3-D catalogs. Some brands, such as Poshmark , enable online shopping through channels like Snapchat. French brand Carrefour enabled consumers to holiday shop via WhatsApp .

Soon, banks may even be able to offer a full 24-hour metaverse banking experience to customers who want to visit a bank branch but want to avoid going through the hassle of driving to a branch. For example, metaverse avatars of bank executives may soon replace voice-based contact centers, allowing banks to provide customers with detailed information (such as bank statements and forms) in real time.

3. Hyper-personalization: Next-Level Engagement Opportunity

Hyper-personalization can leverage advanced AI/ML to take personalization to the next level, delivering more relevant offers and experiences to each customer. In 2023, hyper-personalization will become a go-to strategy for marketers to build loyal customers.

Hyper-personalization as part of engagement campaigns can make each message feel like a unique, one-on-one engagement with customers. By focusing on hyper-personalization, marketers can help ensure that customers receive the communications they are interested in at the right day/time across the preferred channel, leading to positive engagement, increased retention and higher conversion.

4. Personalized Video Engagement Strategies Take The lead

Video-first content is becoming a key area for marketing as it keeps viewers engaged longer than static posts. Statista reported that over three billion internet users watched a video at least once monthly in 2022. Short-form, highly personalized video ads will become a major marketing trend in 2023.

Keep in mind that consumers are more willing to engage with content that is less than 15 seconds, but if marketers can personalize an ad, they have the power to increase viewer completion rates to an average of 85% . Marketers must use short, impactful personalized videos to improve engagement and brand exposure.

Facebook, TikTok and Instagram video reels are good options to grab consumer attention. Instagram, for example, has aggressively optimized its algorithm to prioritize reels and give video creators greater visibility than static content alone. Live streaming also promises to be a great marketing strategy for consumer brands. When combined with influencers and personalized content, live streaming encourages potential buyers to interact with other brand advocates, discuss a product’s strengths and make purchases while watching a video.

5. First- And Zero-Party Data Reign Supreme

Marketers’ anxiety over data collection and privacy issues has increased over the past few years .

Firefox and Safari began blocking third-party cookies in their browsers, prompting many brands to proactively collect and use their customer data. Google is now also envisioning a cookieless future , enforcing the critical role that first and zero-party data will play going forward. Google will be phasing out third-party cookies in 2024.

Zero-party data collected from loyalty/referral programs, buying intent or other sources can be used for product recommendations, creating custom profiles and improving customer service. Similarly, brands can use first-party data gathered from owned digital channels, such as website/app, surveys, feedback, newsletter, SMS opt-ins, etc. This can facilitate offering hyper-personalized experiences, reaching the right customers and fostering customer relationships by understanding their preferences.

In 2023, we will likely witness more emphasis on data regulations and customer privacy, leading brands to re-evaluate their marketing strategies and make significant shifts in marketing spending and resource allocation.

Expect to see these martech trends explode over the year, striking a balance between continued optimization of brand equity, a consistent focus on customer experience, and a conscious evolution of customer engagement. New martech platforms, technologies and trends will further impact customer behavior, and marketers must be able to keep up.

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A bullseye view. behind the scenes at target, our corporate strategy.

Our durable business model is designed to stand the test of time and differentiate us in the marketplace. Over the years, we’ve built a foundation that serves our guests, team members, vendors, communities and shareholders well — and delivers strong results — no matter how the environment around us evolves. It’s the framework that guides us as we live out Target’s purpose — to help all families discover the joy of everyday life. And at the heart of it all? Our team’s culture of caring, growing and winning together.

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We have big plans for 2022

Our strong 2021 performance  shows that our strategy is resonating with guests. We’ll build on that momentum in fiscal 2022 with plans to invest up to $5 billion to keep growing our business and bring guests more of what they love, including ...

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new stores coming to more neighborhoods.

stores remodeled with our latest features and experiences.

new sortation centers to increase our shipping speed, efficiency and capacity.

new Ulta Beauty at Target locations set to open in 2022.

More owned brands

launching across our multi-category portfolio.

New enhancements

to make our same-day services more convenient than ever.

Check out the latest news

A Closer Look at Target's Q3 2022

Target's Latest Store Strategy and Design Has Arrived, And It's Got *Even More* of What You Love — Take a Look

A Closer Look at Target’s Full-Year 2021

There’s a Latté to Love at Target’s Drive Up in 2022 — Order Starbucks, Make Returns and More

Our strategy in action.

Target’s strategy is made up of six pillars that define what we aim to deliver in the coming years — each focused on specific initiatives to make sure we reach our long-term goals. 

• Delivering affordability to our guests.
• Differentiating from our competition with our owned brands and a curated assortment of leading national brands .
• Investing to create an engaging and differentiated shopping experience .
• Leveraging our stores-as-hubs to efficiently provide a convenient and safe experience for our guests whether they purchase online or physically in-store.
• Maintaining and enhancing our relevancy to deepen engagement with guests.
• Leveraging our size and scale to benefit people, the planet and our business, primarily through  Target Forward .

How we get the job done

Bringing our strategy to life is important work, and we couldn’t do it without great people and capabilities. So we take great pride in developing our team ,  operations and  technology .

Shopping powered by stores

No matter how guests choose to shop, our stores answer the call — acting as hubs for in-store shopping, our popular same-day fulfillment services , and shipping orders directly to guests. We'll continue investing to scale our stores-as-hubs strategy, building even better experiences and creating room for future growth.

growth in our same-day services in 2021 on top of 235% in 2020.

Our popular  Drive Up service grew more than 70% in 2021 on top of 600% in 2020.

Our owned brands difference

Our guests are loyal fans of the more than 45 owned brands across our assortment. From longtime favorites like and Good & Gather  food items and Cat & Jack  kids' apparel and accessories, to our newest additions like Brightroom  storage and home organization and Kindfull  pet food, our brands help us offer guests the newness, differentiation and value they love.

in total annual revenue in 2021 — our owned brand sales alone now rival the size of some Fortune 100 companies.

Sales across our owned brand portfolio grew 18% in 2021.

Building the supply chain of the future

We continue to invest in world-class operations, from our store hubs and distribution facilities to our industry-leading fulfillment services  and the global team that brings it all to life. Plus, we're testing innovations to support the model, like our new  sortation centers  that accelerate our last-mile capabilities. These resources allow us to grow our business and meet our guests’ needs, even in the most challenging environments.

sortation centers planned to be open by the end of 2022.

Our sustainability strategy

Our vision is to co-create an equitable and regenerative future together with our guests, partners and communities. We call our sustainability strategy  Target Forward — and it’s centered on leveraging our size and scale to benefit people, the planet and our business.

of our owned brand products aim to be designed for a circular future by 2040.

Meet our strategic partners

We team up with our guests’ favorite leading national brands to create innovative new in-store and digital shopping experiences they won’t find anywhere else. Check out what we've created together.

• Levi Strauss & Co.
• Ulta Beauty

total Ulta Beauty at Target locations planned to be open by the end of 2022.

Forward-Looking Statements: Statements on this page regarding Target’s future financial performance, planned investments in its business, enhancement of fulfillment and replenishment capabilities, new store openings and remodels, growth of strategic brand partnerships, expansion of our owned brands and enhancements to and results of digital experiences, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause Target’s actions to differ materially.  The most important risks and uncertainties are described in Item 1A of Target’s recent Form 10-K and, if applicable, any subsequent Form 10-Q filings. Forward-looking statements speak only as of March 15, 2022, and Target does not undertake any obligation to update any forward-looking statement.

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When I think about Target’s success, it’s all about the fact that we’ve been winning together as one team. Commitment to fostering our caring team culture is more important than ever before.

Brian Cornell, CEO and Chairman

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Marketing91

Levels of Strategy

December 15, 2017 By Hitesh Bhasin Filed Under: Strategy

Strategy may operate at different levels of an organization – corporate level, business level, and functional level. The strategy changes based on the levels of strategy.

Table of Contents

Corporate Level Strategy

Corporate level strategy occupies the highest level of strategic decision making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance.

Top management of the organization makes such decisions. The nature of strategic decisions tends to be value-oriented, conceptual and less concrete than decisions at the business or functional level.

Business-Level Strategy.

Business level strategy is – applicable in those organizations, which have different businesses-and each business is treated as strategic business unit (SBU). The fundamental concept in SBU is to identify the discrete independent product / market segments served by an organization.

Since each product/market segment has a distinct environment, a SBU is created for each such segment. For example, Reliance Industries Limited operates in textile fabrics, yarns, fibers, and a variety of petrochemical products. For each product group, the nature of market in terms of customers, competition, and marketing channel differs.

Therefore, it requires different strategies for its different product groups . Thus, where SBU concept is applied, each SBU sets its own strategies to make the best use of its resources (its strategic advantages) given the environment it faces. At such a level, strategy is a comprehensive plan providing objectives for SBUs, allocation of resources among functional areas and coordination between them for making optimal contribution to the achievement of corporate-level objectives.

Such strategies operate within the overall strategies of the organization. The corporate strategy sets the long-term objectives of the firm and the broad constraints and policies within which a SBU operates. The corporate level will help the SBU define its scope of operations and also limit or enhance the SBUs operations by the resources the corporate level assigns to it. There is a difference between corporate-level and business-level strategies.

For example, Andrews says that in an organization of any size or diversity, corporate strategy usually applies to the whole enterprise, while business strategy, less comprehensive, defines the choice of product or service and market of individual business within the firm. In other words, business strategy relates to the ‘how’ and corporate strategy to the ‘what’. Corporate strategy defines the business in which a company will compete preferably in a way that focuses resources to convert distinctive competence into competitive advantage.’

Corporate strategy is not the sum total of business strategies of the corporation but it deals with different subject matter. While the corporation is concerned with and has impact on business strategy, the former is concerned with the shape and balancing of growth and renewal rather than in market execution.

Here is a video by Marketing91 on Levels of Strategy.

Functional-Level Strategy.

Functional strategy, as is suggested by the title, relates to a single functional operation and the activities involved therein. Decisions at this level within the organization are often described as tactical . Such decisions are guided and constrained by some overall strategic considerations.

Functional strategy deals with relatively restricted plan providing objectives for specific function, allocation of resources among different operations within that functional area and coordi-nation between them for optimal contribution to the achievement of the SBU and corporate-level objectives.

If you liked this article, we bet that you will love the Marketing91 Academy , which provides you free access to 10+ marketing courses and 100s of Case studies.

About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth.

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• The Top 10 Strategy Framework for Businesses Explained
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hello sir, I m priya i m doing my bachelors in business management so please send me information about business level strategy of reliance communication and also bcg matrix for it :)

—–I am doing Strategic Planning course I would like you to send me more helpful resources that can assist me understand better the strategic planning

I think you can check the archives section of Marketing91 and you will automatically get a lot of marketing tutorials.

Really UR article is very informative for the researcher and business students.

Best Regards Bhatti.

Very very rich information on the web so nice.

Best regards Saleem Raza Bhatti.ACMI

Wow this is awesome it has really help me a lot on my research work. More on Levels of strategy please. Bravo.

hello sir I am madhuri kanaskar please give me information of our industry in reliance level of strategy. total all three level of strategy please give a information

what type of leveal of stretegy

Im pursuing my MBA. Please help me answer this: Examine the key characteristics and the relationship among the Four (4) levels of strategy. the course is Marketing management. Please help me answer the question.

I need the characteristics and relationship between Corporate, Strategic Business Unit, Functional and Product/Unit Level Strategy. I need you to assist me.

Dear Sir Or all,

I m pursuing MBA in marketing (last semester) , but i saw there are lots of job profile in marketing so i don’t no for which job profile should i apply as i am not form this background ?

Job profile like : corporate strategy, business strategy, Business analysis, Business intelligence, marketing , Projects & business development, Market analysis, market research

My background : Working as a design Engineer in reliance corporate park (oil & Gas sector) & Done B.tech( Control system Engineering)

So plz help me to choose best job profile.

There is a new series coming up on careers in Marketing. Kindly give me 2 weeks time :)

Hello Sir, I am pursuing my MBA. Please help me answer the below question: Explain various strategy levels of any multinational corporation and also explain any 2 decisions taken at each level.

What is the difference between Corporate Strategy, Business-Level Strategy Marketing strategy?

just puzzled

hi friends pls help me, one question thats how levels of strategy differ between organization

strategic management

A description of each of the four main points and three levels of strategic planning

Help I need help with A description of each of the four main points and three levels of strategic planning. I already know the levels, however, I am having a hard time even finding four main points even in my book.

In my MBA days Marketing91 was one of my best companion. Thanks for all the help.

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Functional Level Strategy – Definition, Types & Examples

How do you achieve your yearly organizational goals? Do you just set an annual figure and start chasing it blindly? Or, do you set semi-annually, monthly, weekly, or even daily milestones? Which one is the right way to achieve your long-term goals? Obviously, setting short-term goals is a better approach to achieve bigger targets.

Moreover, you also need a strategy to manage these routine or day-to-day functional level tasks. In business terms, you need a functional-level strategy. Want to know more about it, its types, importance, and real-world examples? Well, if you do, keep reading!

Table of Contents

What Is A Functional Level Strategy?

A functional level strategy is a plan of action to achieve short-term, routine, or day-to-day business goals to support the corporate and business level strategies . Basically, a functional level strategy helps a business to manage operational activities on a daily or routine basis.

It is important to note that a functional level strategy involves multiple operational or functional areas such as marketing, HR, production, R&D, sales, etc., Moreover, every functional unit generally develops its own functional strategies.

A functional level strategy must have the following ingredients

• It should reflect the corporate and business level objectives/goals.
• It must ensure an optimum allocation of resources in all functional areas/units.
• Last but not least, a functional level strategy needs to maximize the coordination between all functional areas to optimize their outcomes.

Why is Functional Level Strategy Important?

Functional level strategy is important for any organization because of the following reasons;

• It works as steppingstones to achieve corporate and business-level objectives.
• A functional level strategy helps in developing a layout to perform day-to-day/routine business operations.
• It acts as a binding force in any business; integrates different functional/operational departments such as HR, marketing, sales, R&D, production, customer relationship, etc.
• Functional level strategies are more pragmatic/practical in nature and help in dealing with every practical scenario at micro levels (in an organization).

Features of Functional Strategies

Here are some important features of a functional level strategy

• In comparison to business or corporate strategies , functional level strategies are short-termed.
• It sets a layout as to what a business should do to make the grand strategy work.
• The basic objective of every functional level strategy is to ultimately pursue the corporate strategy.
• It pertains to the department, function, and division of an organization.
• Functional level strategies also deal with sub-functional areas (if any).
• Every functional unit or department develops its functional strategy on the basis of guidelines from the higher level.
• Functional level strategies fall last in the hierarchy. They support business-level strategy, which finally supports the corporate-level strategy.
• Functional level strategies mainly focus on the external environment .
• A functional level strategy may vary for the same organization in different locations. i.e different business units/franchises in different areas/cities/states.
• Functional strategies of every functional unit must have strong integration between each other to fulfill overall corporate objectives.

Factors of Functional Level Strategy

As we have already mentioned, a functional-level strategy must be in alignment with the business and corporate-level strategy. If the corporate objective is to increase profits, then business and functional level strategies much resonate with it.

Integration

It is mandatory to implement the functional level strategies horizontally. This helps in integrating different functional units to yield better efficiency.

Existing Resources

Every department, division, or functional unit must have enough resources such as capital, workforce, etc., for the execution of functional level strategy.

Measuring the effectiveness of a functional strategy can be very challenging due to excessive information. Therefore, it is vital that how and what type of data should be tracked to evaluate whether there is any progress or not.

Types Of Functional Level Strategies With Examples

There are major types of functional level strategies, including;

Marketing Strategies

Marketing has evolved as one of the most important functional units in any organization. Although marketing is a vast field itself, it basically focuses on identifying the needs of a target audience and then offering products or services to cater to those needs. A marketing strategy consists of different parts, but a marketing mix (product, price, place, promotion) is arguably the most important one.

Currently, there are a number of marketing techniques, including relationship marketing , social marketing, place marketing, person marketing, direct marketing, etc.

Now, if an organization’s corporate levels strategy focuses on Quality, Delivery, and Efficiency, here is how different organizational departments respond.

Financial Strategies

Financial strategy deals with every section/area that comes under financial management. The strategy mainly focuses on planning, acquiring, using, and controlling a corporation’s financial resources. If we dig a little deeper, a financial strategy deals with issuing/raising capital, assets acquisition, investments, budgeting, working capital management, application of funds, dividend payment, etc.

Production Strategies

A production strategy manages everything related to the production process. This process includes manufacturing system, supply chain management, logistics, and operational planning & control. The core objective of a production strategy is

• Maximizing the quality.
• Minimizing the total cost of production.
• Increasing quantity.

Human Resource Strategies

Human resource strategy in an organization deals with every single aspect related to the organization’s workforce. The core function of any HR department is to work for employees’ development and help them with suitable working conditions and growth opportunities so they can contribute to organizational goals. Apart from that, HR covers recruitment, training, motivation, development, and retention of employees.

Research & Development Strategies

An R&D strategy mainly focuses on two things;

• Innovation; developing new products
• Making improvements in current products

A business needs to keep introducing new products and improve the current ones to implement different business strategies such as market penetration , concentric diversification , and product development. Generally, there are three R&D approaches to implement these strategies;

• Be the innovator; introduce an unprecedented product
• Produce low-cost products
• Be a smart, innovative follower; add more features and launch a similar but better product than competitors.

Examples of Functional Strategies

Yahoo- marissa mayer’s failure to understand company’s functional levels.

Yahoo (an industry giant in the past) hired a prominent and successful Google executive, Marissa Mayer, hoping that she would change the fortunes for “struggling” Yahoo. Initially, the investors strongly believed that she would be able to get the company out of “dark pits.” However, what happened was completely against everyone’s expectations.

Out of many mistakes, Marissa’s biggest blunder was totally misunderstanding the corporation at functional/operational levels. She did make proposals for different changes but underestimated the resistance to these changes from Yahoo’s lower-level employees.

The Outcome

After all her efforts going in vain, she finally proposed the best solution; selling Yahoo. Verizon acquired Yahoo (which was once a $135-billion company) for only $5 billion.

Yahoo ultimately saw its downfall because the company failed to integrate the functional level strategies with corporate strategies proposed by Mayer.