Making the corporate "whole" worth more than the sum of its parts is the biggest challenge facing many multi-business companies. Corporates must to define a role for the corporate center that goes beyond monitoring operations, allocating resources, and coordinating shared functions.
The role of corporate center is to shape the direction and boundaries and identify privileged capabilities and insights. Further, uncovering strategic options hidden among the intangible assets in core businesses can provide new growth avenues.
Business Unit Strategy is the process of developing strategy for a single, largely self-contained business. The business unit could be a whole company focusing on a single line of business or an autonomous part of a larger company comprising of a profit center and its own set of customers and competitors, often called as a Strategic Business Unit (SBU).
A powerful business unit strategy focuses on creating shareholder value by producing products and services whose value exceeds the cost of providing them; capturing value from competitors, customers, and suppliers; competing successfully against others for market share; and cooperating selectively to enlarge the potential market. Central to these decisions are the challenges of selecting how, when and where to compete.
Functional strategy is the game plan for a key functional area within a company. Functional level strategies are the actions and goals assigned to various departments that support your business level strategy and corporate level strategy.
Functional level strategy is concerned with operational level and tactical decision making. It explains the way in which functional activities should be undertaken, so as to achieve better results.
A growth strategy is a critical part of any growth program. It sets the goals and priorities for all other initiatives. But developing strategy for growth is not the same as setting strategy in a low-growth environment. It presents a unique set of challenges that managers have to tackle in what is often unfamiliar territory.
To conquer these challenges and make the new territory their own, they need new skills and a new way of thinking. The most attractive, defensible, and compelling growth strategies are built on the intersections of the company’s market opportunities, capabilities, and management passions.
In order for a business to be successful, there needs to be a roadmap for success. A strategic plan helps to provide direction and focus for all employees. It points to specific results that are to be achieved and establishes a course of action for achieving them. A strategic plan also helps the various work units within an organization to align themselves with common goals.
In reviewing the performance of the organizations, it is always interesting to note that those businesses that perform at the highest levels have formalized strategic plan in place and have implemented it well. On the other hand, those businesses that struggle have no plan in place and seem to flounder in their attempts to be successful. If a business has little idea where it is headed, it will wander aimlessly with priorities changing constantly and employees confused about the purpose of their jobs.
