Source: Image of game plan, two-way arrow, images by Video Scribe, License held by Jeff Carroll. Image of office building, Public Domain, http://bit.ly/1oPcaGk; Image of org chart, Creative Commons, Kelly Eddington.
Hi, I'm Jeff. And in this lesson, we'll go over the basics of business strategy. So let's get started.
A strategy is a proposal of action to realize a primary objective. A business strategy will impact the entire organization, from the employees on the bottom of the organizational chart all the way up to the president and CEO. Since a strategy impacts everyone, all levels of an organization should be consulted when formulating a business strategy.
There are three levels of strategy to consider as a business. Corporate strategy, which is the general manner in which a corporation will coordinate its operation to achieve specific goals. Even though this strategy focuses on the highest level, its impact is felt all the way down to the lowest level.
Business or competitive strategy, which is how a business competes in the marketplace with its goods or services. This is a middle-level strategy since it can differ across various product lines in a business. But it also has impact at the highest and lowest levels of an organization.
And the functional strategy, which is how an organization optimizes its processes and procedures to take the best advantage of the marketplace. This is the lowest level strategy. And it impacts managers coordinating specific functions.
In addition to strategies, organizations also need to plan how they can respond to sudden disruptions or changes. Two methods are contingency planning, which is an organizational plan that is in place for responding to possible events, and crisis management, which are the procedures an organization has in place to deal with emergency events.
And for changes that occur in the course of everyday business, many organizations have change management plans, which are procedures an organization has in place to deal with known changes in the external or internal environments.
OK. Great job. In this lesson, we learned what a strategy is in relation to business. We talked about the different levels of strategy. And we talked about the plans businesses should have in place to respond to unexpected issues and changes.
Thanks for your time, and have a great day.
