Levels of Strategies

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Strategies exist at a number of levels in an organisation. Taking Yahoo! again as an example, it is possible to distinguish at least three different levels of strategy. The top level is corporate-level strategy, concerned with the overall scope of an organisation and how value will be added to the different parts (business units) of the organisation. This could include issues of geographical coverage, diversity of products/services or business units, and how resources are to be allocated between the different parts of the organisation. For Yahoo!, whether to sell some of its existing businesses is clearly a crucial corporate-level decision. In general, corporate-level strategy is also likely to be concerned with the expectations of owners – the shareholders and the stock market. It may well take form in an explicit or implicit statement of ‘mission’ that reflects such expectations. Being clear about corporate-level strategy is important: determining the range of busi- ness to include is the basis of other strategic decisions. The second level is business-level strategy, which is about how the various businesses included in the corporate strategy should compete in their particular markets (for this reason, business-level strategy is sometimes called ‘competitive strategy’). In the public sector, the equivalent of business-level strategy is decisions about how units should provide best value services. This typically concerns issues such as pricing strategy, innovation or differentiation, for instance by better quality or a distinctive distribution channel. So, whereas corporate-level strategy involves decisions about the organisation as a whole, strategic decisions relate to particular strategic business units (SBUs) within the overall organ- isation. A strategic business unit is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBU. Yahoo!’s strategic business units include businesses such...
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