AMB Performance Group Blog

The Importance of Strategic Management Levels

Posted on: September 30, 2021
Business Growth

Successful businesses carefully deploy the right strategy. Developing a solid strategy can help any company compete effectively and build a profitable strategy that can withstand market difficulties. Understanding the basics of business strategy is the single best way to move your company forward.

What Is Business Strategy?

Put simply, a business strategy is a plan you put into place to reach your organizational goals. It can help guide your decision-making process at every turn and improve your company’s overall stability in a changing market. It’s important to note that a business strategy is not a tactic. A tactic is an action you take to achieve that strategy. The strategy itself is the path you’ll follow, and it may involve several different tactics along the way.

Why Does it Matter?

Having a good business strategy matters because it allows you to be proactive. You’re creating the goals you’ll want to follow as your company grows. Moreover, it means a clear direction that you can work toward. That will ensure you make wise decisions along the way. Additionally, once you clarify your direction, you’ll have a way to measure success. Have you hit those goals yet? If not, what do you need to change to hit them? When you know where you’re going, it can be quite a bit easier to define the action steps necessary to get there.

A Closer Look at the Various Levels of Business Strategy

Business strategy is developed at three different strategic levels. On the corporate level, you’re developing a strategy for the entire organization. At the business unit level, you’re looking at how to make that strategy a reality. At the functional unit level, the strategy is translated into goals and objectives.

Corporate Level:

In this space, you’ll nail down exactly what you hope to do. Is your goal to stabilize at this point? Do you want to grow? Do you want to reach a new market segment? This will help direct any decision-making that will come within your company, so the goals here will be fairly broad. Be sure to tie whatever you create here to your current mission and values. It should also take every part of your business into account.

If, for example, you have four different product lines, make sure you address all four. Many use an Objective, Advantage, Scope statement to develop this part of their strategic plan. Your senior executives should be involved with this part of the decision-making process, as they are high-level goals that must be supported throughout the organization.

Business Level:

These ideas are based on the larger corporate-level ideas you created. The focus here should be how you plan to compete. Differentiate yourself from your competitors. This is more complex for companies with a variety of product lines or services. Each one gets its own goals at the corporate level, so each has its own section at the business unit level.

Decide how to use your resources for each and build out objectives that support the goals. A SWOT analysis is a must in this section of the planning process. It allows you to look at every piece of the puzzle and define your strategy moving forward. For example, maybe at the corporate level, the goal was to offer additional skill development for leadership. At the business level, that might translate to partnering with a company for strategic management training opportunities.

Whatever the goals, these should be concrete strategies, not just thoughts about what you want. You’ll want your unit heads involved at this stage as they’ll be able to weigh in with what’s a must in every section of the company.

Functional Level:

These are designed so each department can support the overall goals of your company. What should they do daily to make those goals happen? You’ll want to work with your department heads to build this strategy out, as that will help to ensure that it’s executable. It should be incredibly detailed.

Make sure anything you include in this section is somehow tied to the overall goals and have data points that will align what you’re doing to the overall objectives. This is the space where you talk about things like decreasing customer service call response time or increasing the number of performance reviews.

Formulating Your Own

Creating your own business strategy is a fairly complex process, but with the right people on your side, it’s a task that you’ll want to tackle as quickly as possible.

Let AMB Performance Group help. With the right coaches who can ensure your company’s strategy is in place and will truly help you optimize your business performance, we’re here to move your business forward now. To learn more, contact us today.

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