Definition of strategy and levels of strategy || What is strategy and its level? || Strategic Business Management

Definition of strategy and levels of strategy:

Definition of strategy:

Strategy refer towards methods are means to achieve the long-term goals.

According to Drucker:

Drucker defined strategy into following steps:

• strategy as a pattern of activities seek to achieve the objectives of organisations.
• and adapt its scope, resources and operations to environmental changes in the long run.

Johnson, Scholes and Whittington on strategy:

Johnson, Scholes and Whittington have characterized technique as the ' bearing and extent of an association over the long haul, which accomplishes the benefit in a changing climate through its design of assets and abilities determined to satisfy partner assumptions. 

Johnson, Scholes and Whittington identified the range or scope of strategic decisions as follows:

• Deciding the scope of the entity's activities. What businesses should we be in?
• Relating the activities the entity to the environment in which it operates.
• Allocating resources to the different business activities.
• Giving a high-level(strategic) system for more wrecked dynamic at a functional level. 
• Mirroring the qualities and assumptions for the people in places of force inside the substance.
• Reflecting the values and expectations of the individuals in positions of power within the entity.
• Deciding the long term direction that the entity should take.
• In many cases, implementing change within the entity so that it adapts successfully to its changing environment.

Concept of strategy 

Level of Strategy:

To analyse strategy into a hierarchy of different levels. Johnson, Scholes and Whittington identify three level of strategies:

• Corporate strategy 
• Business strategy 
• Operational/Functional strategy  

1. Corporate strategy:

Corporate strategy is hierarchically the highest strategic plan of the organization,which defines the corporate overall goals and directions and the way in which will be achieved within strategic management activities.

The elements of corporate strategy are as follows:

1.1. Deciding the purpose of the entity: For what reason is the substance in presence? What is its mission and what is it attempting to accomplish? Various individuals have various thoughts regarding what the motivation behind an element ought to be. For instance an organization has investors, its legitimate proprietors, who think about that the motivation behind their organization is to create gains and deliver profits. Notwithstanding, an organization has other partners, like representatives and clients, whose assessment on what the motivation behind the organization ought to be may be totally different.

1.2. Deciding the scope of the activities of the entity: Corporate strategy also involves deciding what businesses the entity should be in, including the range of businesses. For example, the purpose of a transport company is to provide transport services. Its corporate strategy must include a decision about which transport services it will provide (for example, bus travel, train services, air travel, space travel and so on) as well as the geographical areas where it will operate.  

1.3. Matching the purpose and activities of the organisation to the expectations of its owners. The chosen corporate strategy, when put into action, should be capable of meeting the expectations of the owners of the entity. For example, a company’s objectives for profits over the long term should be consistent with shareholders’ long-term profit expectations. Matching the purpose and activities of the organisation to the expectations of other stakeholders in the organisation. 

2. Business strategy:

Business system, additionally called cutthroat technique, is worried about how each business action inside the substance contributes towards the accomplishment of the corporate system. 

• An enormous gathering of organizations may comprise of numerous auxiliary organizations. Auxiliaries may be coordinated into vital specialty units (SBUs) or functional divisions. Each SBU is an alternate business, and ought to have its own business system. 

• In a business substance, business procedure centers around business sectors and business procedure is worried about how to contend effectively in the picked markets with the picked items.

3. Operational/Functional strategy:

Functional (additionally called practical) methodology identifies wit

h specific capacities inside an 

association, like assembling, circulation, advertising and selling, research furthermore, improvement, bookkeeping, IT, etc. 

The reason for functional methodology ought to be to help the business systems and corporate system of the association.

Example:

Manufacturing strategy is a functional technique for an assembling organization. 

The goals of assembling technique are expressed as far as: 

• cost 
• quality 
• conveyance (speed or dependability of conveyance), and 
• adaptability (the capacity to switch between various items or creation techniques). 

There is some 'compromise' between these targets. For instance, the expense objective may be to limit costs, yet this target may be influenced by a necessity to give results of a base quality. The compromise among cost and quality bought to be perceived in the destinations for assembling methodology. 

To detail an assembling technique, choices must be taken for five parts of producing activities: 

• choices about plant and hardware 
• creation arranging and control 
• work and staffing 
• creation plan and designing 
• the association and the board of the assembling capacity. 

Manufacturing strategy may be characterized as the arrangement of choices that decide the ability of the assembling framework and indicate how the framework will work to meet a bunch of assembling goals that are predictable with the in general business goals.