M Bilal Pervaiz

1 Definition of strategy and levels of strategy 1.1 Definition of strategy 1.2 Levels of strategy Corporate strategy What businesses should we be in? Business strategy How should we compete in each selected business? Functional strategy 1.3 Corporate strategy The elements of corporate strategy are as follows: (i) Deciding the purpose of the entity. (ii) Deciding the scope of the activities of the entity. (iii) Matching business activities to the external environment and available resources. (iv) Matching the purpose and activities of the organisation to the expectations of its owners. (v) Corporate strategy and the expectations of owners and other stakeholders (i) Owners' expectations. (ii) Stakeholders' expectations. 1.4 Business strategy According to Porter, a successful competitive strategy must be based on either: Cost leadership means becoming the lowest-cost producer in the market. 1.5 Functional strategy 1.6 A note on levels of planning 2 Elements of strategic management and business analysis 2.1 Johnson, Scholes and Whittington-Defining elements of strategic management Johnson, Scholes and Whittington state that strategic management consists of three elements: (i) Strategic position (ii) Strategic choices (iii) Strategy into action. 2.2 Strategic position 'Strategic position' means making an analysis or assessment of the strategic position of the entity. Johnson, Scholes and Whittington suggest that there are three aspects to strategic position: Functional strategy relates to particular functions within an organisation, such as manufacturing, distribution, marketing and selling, research and development, accounting, IT and so on. The purpose of functional strategy should be to support the business strategies and corporate strategy of the organisation. Strategic planning. This involves identifying the objectives of the entity and plans for achieving those objectives, mostly over the longer term. Tactical planning. These are shorter-term plans for achieving medium term objectives. An example of tactical planning is the annual budget. Operational planning. This is detailed planning of activities, often at a supervisor level or junior management level, for the achievement of short-term goals and targets. Corporate strategy is concerned with deciding which business or businesses an entity should be in and setting targets for the achievement of the entity's overall objectives. Matching the purpose and activities of the organisation to the expectations of other stakeholders in the organisation. Business strategy, also called competitive strategy, is concerned with how each business activity within the entity contributes towards the achievement of the corporate strategy.