The Main Characteristics of Business Level Strategies

by Wendel Clark; Updated September 26, 2017
...

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.

Specificity

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.

Short-Term Orientation

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.

Simplicity

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.

Independence

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.

References

About the Author

Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.

Photo Credits