1. Levels of Strategic Planning
Planning can take place at different levels in an organisation.
Three levels of strategy are typically distinguished: corporate, business and functional.
2. Corporate Level (Strategic Level)
The corporate-level strategy is concerned with the overall purpose and scope of an organisation and how value will be added to the different parts (business units) of the organisation.
Planning at this level looks into the formulation, evaluation and selection of strategies for the purpose of preparing a long-term plan of action to attain objectives.
Key questions to consider at this level of planning include:
What business is the firm in?
What business should the firm be in?
How integrated should these businesses be?
Example: For News Corporation, the global media conglomerate, diversifying from print journalism into television and social networking are corporate-level strategies.
3. Business Level (Tactical Level)
The second level is described in terms of business-level strategy, which is about how to compete successfully in particular markets or how to provide best value services in the public services.
Planning at this level is about the utilisation of resources to achieve specific objectives in the most effective and efficient way.
Planning at this level often relates to a strategic business unit (SBU).
Key questions to consider at this level of planning include:
Which products should be developed?
What approach to gain competitive advantage?
Which markets to enter?
Example: News Corporation contains stand-alone segments of the company which clearly fit with corporate-level strategy. For instance, the Fox Movie Channel and the National Geographic Channel are part of Cable Network Programming, and the Wall Street Journal and HarperCollins are part of Publishing.
4. Functional Level (Operational Level)
The third level of strategy is at the operating end of an organisation.
Operational strategies are concerned with how the component parts of an organisation deliver effectively the corporate- and business level strategies in terms of resources, processes and people.
Planning at this level is concerned with short-term utilization and employment of resources, both human and non-human.
Key questions to consider at this level of planning include:
How do the different functions of the business support corporate strategies?
How do the different functions of the business support business unit strategies?
Example: MySpace engineers had to keep developing enough processing capacity to cope with the strategy of rapid growth. Operational decisions are closely linked to business-level strategy.
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