What are the 7 types of strategy?

 

What are the 7 types of strategy?

The 7 types of strategy

Types of Strategy

There are various ways to categorize strategies, but one common approach is to classify them into three broad types: corporate strategy, business strategy, and functional strategy. These categories represent different levels of planning and decision-making within an organisation.

‌Corporate Strategy:

Corporate strategy focuses on the overall scope and direction of an entire organization. It involves making long-term decisions that determine the company's vision, mission, and goals. Corporate strategy typically addresses questions such as:

What industries or markets should the company operate in?

What should be the company's overall business model?

Should the company diversify its product or service offerings?

What mergers or acquisitions should the company pursue?

Corporate strategy considers the organization as a whole and guides the allocation of resources to different business units or divisions.

‌Business Strategy:

Business strategy deals with how a specific business unit or division within an organization will compete within its chosen industry or market segment. It focuses on achieving a competitive advantage and delivering value to customers. Business strategy involves decisions related to:

Target market selection: Which customer segments will the business serve?

Product or service differentiation: How will the business differentiate itself from competitors?

‌Pricing strategy:

How will the business price its offerings?

Marketing and distribution channels: How will the business reach and deliver products to customers?

Business strategy aligns with the broader corporate strategy and aims to create sustainable competitive advantage for the specific business unit.

‌Functional Strategy:

Functional strategy refers to the strategies developed by individual functional areas or departments within a company, such as marketing, finance, operations, human resources, and so on. These strategies support the overall business and corporate strategies by addressing specific challenges and opportunities within each functional area. For example:

Marketing strategy:

How will the marketing department promote and position the company's products or services?

Financial strategy:

How will the finance department manage capital, investments, and funding?

Operations strategy:

How will the operations department optimize production processes and supply chain management?

Functional strategies are typically more tactical and detail-oriented, focusing on the day-to-day activities and specific goals within each department.

It's important to note that these three types of strategies are interconnected and should be aligned to ensure coherence and synergy across different levels of an organization.