Strategic Levels

Strategic Levels

Strategic Levels


When the firm produces one type of product, and provide a service, its managers can develop a strategic plan. Some diversified companies each direction has its functional units, such as the finance department and the marketing department. So in theory allocate corporate strategy level, business level and functional level.

Corporate-level strategy

In the conduct of several businesses, organizations need enterprise-level strategy. It allows you to find out what you can do business areas of the company. At this level of strategy defines the tasks of each business unit.

Business-level strategy

This level involves the development of strategies that allow you to select a method of how the organization will compete in each business area. For small organizations engaged in the same type of business and large, which are diversifying their activities, producing one type of product, business-level strategy is usually the same as the corporate. But in organizations enliven their activities, each division uses its own strategy, which determines which products and services will be offered to the client. When an organization is engaged in several different types of businesses, the planning problem is usually easier, creating a separate strategic business unit. The strategic business unit is a single sector of business or a group of related fields. Each unit has a special mission, and strategy of the competitors. This distinguishes one business unit from other lines of business organization.

Functional level strategy 

In organizations where there is a functional departments: production, marketing, human resources, engineering, research and others, their strategies should be aimed at supporting the business strategy level.

Using structural methods such as monitoring the environment, forecasting and benchmarking, modern managers are able to fairly accurately analyze the conditions outside the firm.

Monitoring of the environment 

Currently, managers of organizations often use the method of monitoring the environment to anticipate and correctly interpret the notable changes in the external environment. It must be said that the research in this field has shown that companies that have adopted the latest learning systems environment, the vast majority of their profits increase. Companies that do not follow the changes in the external environment, are more likely to be in the opposite position.

One of the fastest growing aspects of the observation of the environment, supports the collection and processing of information about competitors. This is the process by which an organization gathers information about their competitors, for who they are, what they do, how their work affects the work of the company and other aspects.

In opinion of experts to gather information on competitors, the main part of what managers need to know about your competitors, they can check with their employees, suppliers and customers. At the same time, such activities, it is not intended to industrial espionage. Examples of readily available sources of information of this type can serve as media reports, reports to government agencies, annual reports, job postings and market research in several fields of interest. Besides, there are companies that regularly purchase competitors products and send them to the engineering department for comprehensive investigation, a process called reverse engineering. As a result, experts are finding out what technical innovations used in the development. Powerful sources of information are the Internet as well as in the pages of companies contains a large number of information about new developments and products offered.

Careful monitoring of the environment usually allows time to identify the factors that may affect the company. Therefore, it is better to focus on a few of them are of the greatest importance, and on the basis of each of them to develop a scenario. This is called prediction of likely future developments, which consists of their sequence.

Prediction

Monitoring of the environment can form the basis for the prediction of the organization. The point is that the information gathered is used to develop scenarios that are the basis for projections that can partially predict the results.

Revenue forecasts, it is an important element of planning for both commercial and non-commercial organizations. To make predictions about income, often begin with an analysis of figures from previous years. For example, data on income of the company in the past year, you can adjust according to the most prominent and significant trends identified in the monitoring of the environment.

Foresight is an attempt to predict the changes in technology and set a time frame in which the projected new technologies are likely to become economically viable. Through the use of different methods of monitoring the environment, you can get information about the most likely prospects for development of new products and their availability in the market.

There are two types of quantitative and qualitative methods of forecasting. In the quantitative prediction using a number of mathematical methods analyzes of business activity in the last few years, and on the basis of findings by the prediction of future results. Qualitative prediction based on the consideration of estimates and opinions of experienced professionals.

To improve prediction, use the following guidelines. If possible, use the most simple methods of forecasting. Compare the prediction, with the current state of affairs, that is, it must be assumed that the bulk of the company can continue to operate. Do not rely on the use of a method of prediction. It is important to remember not complete accuracy in the determination of possible trends. Projections should be for a short time, it will give an opportunity to significantly improve accuracy.

Benchmarking

Using this tool involves borrowing as our competitors and other companies they use technologies and systems, to achieve the same high level of performance. Managers can increase the quality of the product and proposed services, and now even small companies are taking advantage of this method for planning.
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