Business-level strategies are the strategies that are formed by individual business units within a company. There are four characteristics that differentiate business-level strategy from corporate strategy. Managers should understand these characteristics and how they apply to their own strategic decision making.
Business-level strategies are specific, rather than broad. This means that they deal with specific issues that affect the particular business unit. Examples of specific issues are deciding a pricing strategy and creating a product mix. These strategies deal only with the specific business unit and do not extend to the rest of the firm.
Corporate strategy tends to be oriented toward long-term goals. Business-level strategy, in contrast, is focused on short-term goals. Examples of short-term goals include quarterly and annual revenues, return on investments, sales and production levels. Business units tend to focus on these short-term goals while allowing corporate strategists to make decisions regarding the long-term focus of the company.
Business-level strategies tend to be fairly simple in nature. Corporate strategies tend to focus on abstract goals such as building core competences or creating firm flexibility. Business-level strategies however, tend to be much simpler. Goals tend to be tangible objectives such as increasing market share or developing brand recognition.
An important characteristic of business-level strategies is the concept of business-unit independence. The individual business unit is given the independence from the company as a whole in order to decide certain strategic issues on its own. This allows business-level strategies to deal primarily with the concerns of the business unit without interference from other units.
- "The Craft of Strategy Formation"; Eric Wiebes, Marc Baaij, Bas Keibek and Pieter Witteveen; 2007
- James Madison University: Business-Level Strategies
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