Business Level Strategy Vs. To achieve their goals, corporations may own multiple business units in various industries. Business-level strategy is used to obtain a customer base and sell a product at a profit.
Business Level Strategy Vs. To achieve their goals, corporations may own multiple business units in various industries. Business-level strategy is used to obtain a customer base and sell a product at a profit. Corporate-level strategy, on the other hand, is used when deciding what business units to sell and purchase, and how to integrate operations and find synergies between them.
Business-Level Strategy Business-level strategy focuses on how to attain and satisfy customers, offer goods and services that meet their needs, and increase operating profits. To do this, business-level strategy focuses on positioning itself against competitors and staying up to date on market trends and technology changes.
Economist Michael Porter theorizes that there are two main types of business strategy: A business can also integrate these two strategies.
Cost Leadership and Differentiation Cost leadership is the tactic of winning over customers through aggressive pricing and making profits through high efficiency.
For example, a car manufacturing company like Kia that prices its vehicles on the lower end of the price spectrum is employing a cost leadership strategy. A company that differentiates adds unique features or services that command a higher selling price. A car company like Tesla that offers premium electric vehicles is using differentiation to create a competitive advantage in the market.
Although cost leadership and differentiation may seem like opposite ends of the spectrum, many businesses use aspects of both strategies.
For example, Toyota offers a hybrid electric vehicle that offers unique features but maintains a modest price point. Video of the Day Brought to you by Techwalla Brought to you by Techwalla Corporate-Level Strategy Compared to business strategy, corporate strategy examines success from a higher level.
Corporate strategy is focused on obtaining a mix of business units that will allow the company to succeed as a whole. Improve Efficiency Corporate strategy seeks to make a set of business units more than the sum of its parts. It can do this by developing relationships between business units, which allows them to share resources and avoid duplication of efforts.
A corporation may also choose to take over one of its suppliers, which ensures it has more control over the availability and pricing of supplies.
This is referred to as vertical integration. Company Portfolio An important consideration of corporate strategy is the diversity of the corporation's portfolio of businesses. For example, if a financial services company only owns businesses that focus on tax preparation, the whole corporation could go under if tax laws change.
By purchasing companies in slightly different industries, like financial accounting and personal finance services, it can decrease its risk of losses. It can also shield the company from liquidity risk by purchasing companies with complimentary cash flows.
For example, a tax preparation company makes most of its revenue in tax season, so a business that earns revenue year-round can provide support during slow times.
References Strategic Management Insight: Cite this Article A tool to create a citation to reference this article Cite this Article.STRATEGY BUSINESS AND CORPORATE LEVEL STRATEGIES Strategy is a tool to prepare and implement plans in time to come. The business level strategy guides an organization, UBA in this case, to analyze its competitive environment and understand its clients, suppliers and competitors.
There are various levels of strategy in an organization - corporate level, business level, and functional level. The strategy keeps changing. Corporate strategy is the highest level of strategy followed by business level strategy and finally functional level strategy.
Each of these is explained in this article. Jun 30, · Small businesses contemplating diversification, on the other hand, face a raft of additional corporate-strategy decisions, as well as business-level decisions for the new business unit, should it.
Business-Level and Corporate-Level Strategies Business-Level and Corporate-Level Strategies Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a .
Buy Business-Level and Corporate-Level Strategies essay paper online An Executive Leadership Team is the highest ranking decision making management body at Pfizer.
It is a collaboration of top leaders in the company that focuses on major strategic, financial, and operational resolutions. Business-Level and Corporate-Level Strategies Business-Level and Corporate-Level Strategies Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a .