A Business Level Strategy: What Is It? The Best Way To Do It + Examples

Many leaders devote significant time and energy to strategic planning, yet their big strategies need to be revised. Frequently, the problem is not with the plan they develop, but with the strategy they overlook—the company-level strategy. 

This approach focuses on the implementation of initiatives that are particular to a business unit. It’s like “the middle level” of strategy, and as is frequently the case with the middle level, it gets lost in the shadow of the broader picture.

According to Gartner’s report, 67% of a company’s essential operations are unrelated to business units or corporate strategy. It also demonstrates that when new growth initiatives are implemented, 67% of workers do not understand their function. According to these data, most firms focus largely on their overarching, high-level strategy, ignoring how these strategies transfer to lower levels and functions.

Thinking in terms of strategy levels might help you divide your entire approach into smaller chunks. This method makes it easy to comprehend who is in charge of what and how the plan should be implemented.

This article will lead you through the components of a company plan. We’ll teach you how to create a great strategic plan for your company and then put it into action, ensuring that all the parts fit together perfectly.

What Exactly Is Business Level Strategy?

The strategic planning and implementation efforts that determine and drive the direction of an individual business unit are referred to as business-level strategy. These efforts will often entail determining how to obtain a competitive edge and provide consumer value in the market in which the business unit operates.

As a result, organisations with only one unique business will frequently merge business and corporate strategies at a single strategy level.

The Advantages of a Business Strategy

Before we go into the specifics of business strategy, let’s go over why you should have one regardless of your business model or company size. A well-defined commercial strategy:

Gives a clear path and purpose for decision-making and resource allocation.

Assists in aligning the work of many departments and teams, creating collaboration and synergy.

Increases competitive advantage by recognising distinct value propositions and possibilities for differentiation.

Assists in the identification and capitalization of market opportunities while limiting potential strategic risks.

Improves organisational efficiency, encourages innovation, and allows for accurate measurement and performance evaluation.

Finally, a well-planned and implemented company strategy may lead to long-term development, profitability, and success.

What Is the Difference Between Corporate and Business Level Strategy?

There appears to be some uncertainty regarding the distinction between corporate and company-level strategy, so let’s clear things up and get our terminology right.

When an organisation has many businesses operating in different markets, a corporate-level strategy comes into play. It establishes the overarching orientation of the organisation. It determines which markets to compete in, how to allocate resources within the organisation, and other such big-picture decisions.

A company-level strategy, on the other hand, focuses on a single business inside the organisation. It focuses on developing a game plan designed particularly for that business unit to achieve success in its market segment.

To summarise, a corporate-level strategy guides the entire organisation, whilst a business-level strategy guides a single business unit to prosper in its market.

Let’s look at an example of a bank and how they employ strategy levels in their organisation to assist in clarifying the distinction between the two levels.

Examples of Different Business-Level Strategies 

It’s helpful to look at some business-level strategy examples to better grasp how it varies from other strategy levels. 

Organisations often examine five sorts when deciding on the optimal strategy for a certain company level. Let’s look at each of them in detail to determine what type of competitive edge they provide:

Cost Leadership

A cost leadership approach is selling items at a lower cost than your competitors. Businesses use economies of scale and numerous techniques to become cost leaders, such as enhancing facilities, investing in tools, lowering administrative costs, and minimising spending linked to R&D and POS operations. The end objective is to obtain the lowest possible price for your goods or services.

Differentiation

Rather than focusing on reduced costs and passing the savings on to consumers, differentiation strategies emphasise product development and marketing in a way that gives better value to customers and emphasises unique qualities that deserve a higher price point.

Apple is the most well-known example of the distinction, having implemented this approach across all business units (laptops, smartphones, tablets, and so on). Apple has substantially spent on R&D, customer service, and marketing, allowing them to charge a premium price for their goods without sacrificing market share.

Cost leadership with a focus

Businesses might focus their efforts by targeting a specialised market or even a subset of that niche to minimise expenses even more.

For example, a tool maker may decide to focus their cost-cutting approach only on the professional tradesperson market. 

Companies may better understand their consumers’ demands and produce value more effectively by restricting their focus.

Focused differentiation

Standing out from rivals while concentrating efforts on a smaller segment of their consumer base is the goal of a targeted differentiation approach.

This may appear contradictory, but knowing a smaller client group helps organisations more accurately predict consumers’ wants, making value creation an easier process.

Low-cost/difference integration

Some companies succeed by combining a low-cost approach with distinctiveness.

The advent of “premium fast food” restaurants, which provide the low costs associated with typical fast-food franchises while giving a differentiated selection of options, is a wonderful example. The combination gives just enough differentiation to appeal to a certain market. The success of such eateries demonstrates the efficacy of this method.

If you’re having trouble deciding on the right business plan for your company unit, get in connect with GOLDEN GATE PROPERTIES

How to Create a Strategic Business Plan

Once you’ve decided on the sort of business strategy you want to follow, you must create a strategic plan outlining the steps your company will take to attain its goals.

If you need help writing a strategic plan, we’ve written about it before. But it can’t hurt to go over the procedure fast regardless.

Examine your existing situation.

First, you must collect and analyse essential information regarding your company’s current status and performance. 

This might entail monitoring KPIs, doing a SWOT analysis, assessing the competitive environment, reviewing financial performance, soliciting customer input, taking into account internal capabilities, and analysing risks and problems. 

This type of study will assist you in developing a fact-based knowledge of your existing situation, which will influence your strategic direction and choices. 

Determine priority emphasis areas

Determine the primary areas on which you will concentrate your efforts as you work towards your vision. Your previous step’s analysis should be useful. These key areas should be more precise than your vision statement, but not so exact that they are tied to specific metrics or dates.

Establish strategic goals

What you intend to achieve is represented by strategic objectives. These objectives are somewhat high-level, but they should still have a timeframe. Check that your strategic objectives correspond to one or more emphasis areas. Typically, each focus area will contain 3-6 objectives.

Designate KPIs

KPIs are values that assist you in tracking your progress towards your strategic goals.  It is critical to create KPIs that directly contribute to the achievement of specified goals or objectives. Otherwise, you risk deviating attention, effort, and resources from critical KPIs.

Make projects

Projects indicate what you will do to achieve your goals. Projects must be defined, with clear dates and a description of the steps you want to do. 

Each project should be aligned with at least one strategic goal and detail how it will contribute to that goal’s achievement. Typically, any strategic aim will contain numerous initiatives.

Pro tip: When developing your strategic plan, bear in mind that business-level strategy decisions are often based on an examination of two major factors: customers and core strengths.

The Most Important Focus Areas For Business-Level Strategies

Now that we’ve established how to organise a company plan, let’s look at the material that should be included. 

While the specifics may vary depending on the organisation, your company-level plan should typically cover two main areas.

Competencies Fundamentals

The idea of core competencies is critical in company-level strategy. 

Core competencies are the distinguishing characteristics of a company that set it apart in the market and give value to consumers.

Identifying and capitalising on these abilities to obtain a competitive edge is a critical component of corporate strategy.

If you’re having trouble identifying your company’s key skills or competitive advantages, a VRIO study is a good place to start. 

Customers

Another critical part of company strategy is understanding your clients. 

You must understand your present and future clients, as well as how they engage with your company. 

Consider the following who, what, and how questions to help you acquire this understanding:

Who are the clients?

To get a detailed view of your consumer base, look at demographic characteristics and consumption trends. 

Business-level strategists, as opposed to corporate strategists, frequently have a thorough awareness of their consumers. This enables them to personalise strategic decisions in ways that are just not possible at the corporate level.

What items do customers require?

Understanding your consumers’ wants and demands is critical for building and sustaining a competitive edge. 

Businesses that meet client wants and produce value are successful. That’s why you should get to know your target consumers so well that you can estimate changes in client demands and anticipate swings in demand. 

How can the company meet the demands of its customers?

Finally, to achieve customer satisfaction, organisations must harness core capabilities, resources, and an awareness of their target audience. Businesses must provide a solution to an urgent problem as well as a product or service that is recognised as valued by the target market group.

Putting everything together

You now have a strong basis for building strategies that nurture competitive advantage and produce value since you have a thorough grasp of your key strengths and the clients you serve. The ultimate purpose of the company-level strategy is to achieve this.

Final Thoughts

Business-level strategy is where abstract strategic directions from the corporate level translate into tangible initiatives that generate real-world value.

Together with a strategy planning & execution expert like Golden Gate Properties, we can help you achieve great strategic feats. The combination of the right approach and the right team empowers you to:

Create simple yet impactful strategies

Reverse engineer your strategy

Adapt quickly and effectively

FAQs on Business Level Strategy

Should a company’s strategy evolve? If so, please explain why. 

Yes, corporate plans should evolve to reflect changing markets, competition, consumer wants, and internal capabilities.

The capacity to adapt also indicates that the company is analysing its present performance, and the influence of its strategic decisions, and is thinking about ways to improve. The ability to adapt is critical for long-term success.