WEEK 4 

DIFFERENT LEVEL OF STRATEGIES

The are 3 categories of strategies consider that the decision-making process is done at different level or under three different circumstances  within the organization. 

1) Corporate Level Strategies- Considered for the overall movement of the organization. As looking from helicopter perspective, looking at overall and not giving the small components (department and product lines) much emphasis. It will give the priority to the movement of the entire organization and decision will the have to be made at the top of corporate level with the inputs and participation from the various divisions. Thus, overall the company should chosen between growth, stable growth and turnaround or combination strategy.

2) The Business Level Strategies - Look at the organization from the perspective of handling the competition. A competitive environment requires the organization to think of ways to outwit the competitors general. Thus, the corporate level strategies on their own are insufficient to handle the competitors when dealing with the business operations. Rationally, the recommendations made based on Porter's Competitive Model ( I will show in another post). has been the major reference and they are the business strategies of differentiation, cost leadership, and focus.

3) Functional Level Strategies - Consider actions to be taken at the various functional or operational levels of the organization. Specifically, the organization has t o look at its management, marketing, financial, and operation/production divisions to realize overall corporate level strategies that have been decided at the higher level. At this functional level, the strategies will be selected based on the situational analysis of the organization's activities.

CORPORATE LEVEL STRATEGIES

Corporate level strategies is attempts to identify strategies that corporations or organizations decide to pursue for the benefit of the whole organization.

There are various level of strategies which divided into 3 major which is the grand strategies, secondary level strategies and the last one is tactical level strategies. All three are relates among its.

1) Grand Strategies

a) Growth - Next year growth rate is higher than the previous year

b) Stable Growth - Next years's growth rate is the same as the previous year.

c) Turnaround - The growth rate is positive as compared to the previous year.

d) Combination - Organization adopt a few strategies combining some of the three strategies ( growth, stable growth and turnaround)

2) Secondary Level Strategies

a) Expansion Strategies - To increase activities so that the volume of the output is increased in term of numbers, weight, size, branch, etc.

b) Integrate - Integration strategies which is to have more control of the production or services such as through the control of resources (backward integration strategy) or the added value of down the line activities as in warehousing, wholesaling and retailing (forward integration strategy).

c) Diversify - Basically, the diversification strategic the increase in the number of outputs produced or services rendered. The diversification strategy can be divided into concentric (increase variety products manufactured that related to it present operation), conglomerate (adding variety in unrelated sector), horizontal (diversified because of requests by its regular clients) and geographical (Being new variety as it carry out to from origin to new country) diversification strategy.

d) Reduce - Reduction or Turnaround strategies is all off the strategies grouped together as they all represent actions that are commonly used in corporations facing some difficulties on their operations as reflected in their negative performance indicators.

3) Tactical Level Strategies

a) Organically -  For example grow by using the available resources like setting branch and allocating required personnel from existing establishments while recruiting and training some more.

b) Joint Venture - Two or more company setting up new company with equity participation from involved parties. The name of the equity provider ( companies) still exist.

c) Merger - Vice versa from joint venture, merger type is setting up new company while the names who involved in merger will not exist anymore.

d) Acquisition - or takeover is when one company negotiated to takeover another company. Similar to buying of the majority equity of the company.

e) Reverse Take Over - For example company A is acquired company B. But the company B management manages company A which now the management of company B own company A which the company A is a listed company. The management of company A has agreed before they acquired that they will allow its management be taken over by staff from company B.

f) Strategic Alliance - understanding between two or more parties that decided to work together to achieve their respective objectives without any structural changes. It also termed as smart partnership or win-win situation.

g) Licensing/ Franchising - Licensing is a tactical strategy to seek permission to run a business based on that of the licensor. When the permission obtained, the company allowed to manufacture or do the business on the licensed product or service. For franchising, it is a strategizing for the company through this mode that allows it to practice not only the product or service but also the whole operating system even to the extent of the advertisement being done centrally by the company and the colour scheme  and decor of the set up as well.

References and text: Strategic Management Z.Abidin.M & Ho Jo Ann & Wong Foong Yee. 2014. Second Edition. p 78-92