Levels of Strategy-Making in a Single-Business Company

1. Two-Way Influence Two-Way Influence Levels of Strategy-Making in a Single-Business Company Executive-Level Managers Business Strategy Functional Managers Functional Strategies Operating Managers Operating Strategies

2. Corporate Strategy fora Diversified Company Narrow or broad-based diversification Is diversification related, unrelated or a mix? Approach to capital allocation Corporate Strategy Scope of geographic operations Efforts to capture cross-business strategic fits Moves to divest weak business units Moves to add new new businesses Moves to build positions in new industries

3. Tasks of Corporate Strategy • Moves to achieve diversification • Actions to boost performance of individual businesses • Capturing valuable cross-business strategic fits that result in 1 + 1 = 3 effects! • Establishing investment priorities and steering corporate resources into the most attractive businesses

4. Functional Strategies Components of a Single-Business Company’s Strategy Planned, proactive moves to outcompete rivals Responses to changing conditions Efforts to build competitive advantage Business Strategy Scope of geographic coverage R&D strategy Supply chain management strategy Collaborative partnerships and strategic alliances Manufacturing strategy Marketing strategy Finance strategy Human resources strategy

5. Business Strategy Involves • Forming responses to changes in industry and competitive conditions, buyer needs and preferences, economy, regulations, etc. • Crafting competitive moves to produce sustainable competitive advantage • Building competitively valuable competencies and capabilities • Uniting strategic initiatives of functional areas • Addressing strategic issues facing the company

6. Functional Strategies • Game plan for a strategically-relevant function, activity, or business process • Details how key activities will be managed • Provide support for business strategy • Specify how functional objectives are to be achieved

7. Operating Strategies • Concern narrower strategies for managing grassroots activities and strategically-relevantoperating units • Add detail to business and functional strategies

8. Uniting the Company’s Strategy-Making Effort • A company’s strategy is a collectionof strategies and initiatives being acted on by managers at various organizational levels • Separate levels of strategy must be unified into a cohesive,company-wide action plan • Pieces of strategy should fit together like the pieces of a puzzle