20 Apr Organizational Strategy in Project Management
Picking the perfect organizational strategy for your company is a complex, multi-faceted responsibility with significant and long-lasting consequences. With so many options, choosing the right approach to stake your company’s long-term growth can quickly get overwhelming.
But never fear – we’re using this blog to break down the five categories of organizational strategies you need to be aware of to give you a jump start on aligning your business activities with your long-term goals and vision.
From the importance of organizational strategy to competitive strategies and corporate-level strategies, we’ll provide you with the knowledge and tools you need to create an effective roadmap that guides your business to success. Plus, we’ll discuss real-world examples of well-known companies that have successfully implemented different types of organizational strategies.
So, let’s get started and discover the right organizational strategy for your business.
What Are the 5 Organizational Strategies?
Businesses can deploy several types of organizational strategies to establish a roadmap to success.
Businesses have a wide range of options when it comes to choosing an organizational strategy. However, it’s important to remember organizational strategies aren’t one-size-fits-all.
Businesses that want to maximize the impact of their new strategy should ensure their chosen direction supports their long-term vision, aligns with your company culture, and effectively promotes your products and services.
So without further ado, let’s break down the five categories of organizational strategies to demystify your decision.
- Competitive Strategy
Competitive strategies are a relatively straightforward category of organizational strategy. Competitive strategy hinges on identifying your company’s unique strengths and your competitors’ weaknesses to identify opportunities to gain a competitive edge.
Companies that pursue a competitive organizational strategy prioritize aggressively attacking the growth opportunities they’ve identified to capture increased market share, attract new customers, expand their product and service offerings (and, by extension, their revenue streams), and drive enhanced profitability.
A typical example of a competitive organizational strategy in action is a “focus” strategy. Focus strategies encourage companies to niche down and pour resources into serving under-leveraged portions of the market, allowing smaller companies to gain a firm footing and grow brand loyalty among a profitable segment of the larger market.
Pursuing a focus strategy is one of the simplest yet most effective ways to implement a competitive organizational strategy.
Focus strategies are a subset of competitive organizational strategies that aim to gain a competitive edge by identifying – and focusing – on under-leveraged segments of their industry or market. After identifying the gap in the market, businesses pursuing this strategy “focus” their efforts and resources on capturing and dominating that market segment.
This type of competitive organizational strategy’s emphasis on providing a niche solution leads to enhanced customer loyalty, an improved brand image, and reduced price sensitivity.
- Corporate Level Strategy
Corporate-level organizational strategies are less about competition and more about providing an overarching sense of direction that guides essential tasks like:
- Allocating resources
- Managing business units
- Outlining operational goals and processes
- Identifying key performance metrics
- And pursuing growth investments
This “big picture” style of organizational strategy empowers businesses to provide a clearly communicable framework that covers the broad strokes of their business’s short, medium, and, most importantly, long-term goals.
Common examples of corporate-level strategies include:
- And Vertical and Horizontal Integration
- Business Level Strategy
Business-level organizational strategies encompass a narrower focus than corporate-level strategies and prioritize responsibilities like establishing procedural frameworks and implementing the “big picture” changes handed down by corporate and competitive-level initiatives.
Rather than providing high-level direction, business-level strategies provide a roadmap for how your company will approach tasks and responsibilities like:
- Product Quality
- Brand differentiation
- And customer experience
A typical example of business-level organizational strategies in action is product differentiation.
Product differentiation aims to capture market share and drive sales by offering improved, unique, or otherwise distinctive products and services that stand out from the standard offerings in their market.
For example, Apple consistently pursues product differentiation by creating innovative electronic products that are branded and marketed using their distinctive and famous “i” and “Apple” monikers (iPhone, iPod, Apple Watch, Apple Pen.)
- Functional Level Strategy
Functional-level organizational strategies dictate how functional units – often departments like sales, marketing, and production – will contribute to the competitive, corporate, and business-level strategies your company has implemented.
Functional-level strategies provide procedural guidelines for bringing the goals and visions created by higher-level strategies to fruition within the functional units of your business.
In action, a typical functional-level organizational strategy leads to new policies, processes, and success metrics for tasks like:
- Finance – developing new financial reporting systems
- Marketing – promoting new products, services, or marketing angles
- Sales – adjusting sales targets, scripts, and strategies to align with new corporate, competitive, or business-level strategies
- H.R. – changing hiring requirements and ideal candidate profiles to capture talent that can support new corporate, competitive, or business-level strategies
5. Operational Level Strategy
Operational-level organizational strategies are the narrowest and most action-oriented of the five types of organizational strategy.
Operational-level strategies exclusively prioritize creating replicable, data-driven processes for implementing, evaluating, and evolving the changes to your company’s policies, procedures, goals, and vision created by higher-level strategies.
Operational-level organizational strategies provide the framework for your business units to optimize essential roles and responsibilities like:
- Quality control
- Inventory control
- Production planning
- Project management
- Supply chain management
- And more.
What Is an Example of Organizational Strategy?
Now that we understand why organizational strategy is important, let’s take a look at a common organizational strategy example in action.
Cost leadership is an extremely common and impactful example of organizational strategy in action. Cost leadership strategies aim to generate competitive advantages by providing the lowest cost option in their particular industry, market, or niche by aggressively cutting expenses at every level of your business.
There are two distinct approaches to cost leadership – broad and focused. Broad cost leadership aims to capture maximum market share by providing the lowest cost option to price-sensitive buyers.
Conversely, companies that pursue focused cost leadership leverage their price competitiveness to capture a segment or niche within their larger market. To achieve this, organizations relying on a focused cost leadership strategy utilize a strategic narrowing of business operations to minimize overhead expenses related to research, development, production, labor, and delivery.
Both types of cost leadership utilize strategies like:
- Renegotiating prices with vendors
- Streamlining research and development
- Optimizing production and delivery
- Adopting cost-effective marketing strategies
- Emphasizing economies of scale
- And adopting automation to reduce labor costs
Examples of well-known companies that have leveraged a cost leadership organizational strategy to generate consistent success include:
- And Southwest Airlines
Aligning Projects: Why Is It Important to Align Projects to Business Strategy
Identifying an organizational strategy that allows you to align your efforts and resources with your long-term goals is a terrific step toward generating steady success. But aligning projects with business strategies to achieve profitability and sustainability is equally important.
Aligning your ongoing and future projects with your new organizational strategy is essential for promoting maximum efficiency and impact from your C-suite to your entry-level team members.
By accomplishing this integral integration, your company may be able to generate the momentum needed to effectively pursue the goals and company-wide direction provided by your organizational strategy. Your projects are also more likely to suffer from disorganization, inefficient processes, siloed communication, and poor resource management.
However, companies that invest time and energy into developing a robust alignment and implementation plan can look forward to benefits like improved decision-making, streamlined communication, strong collaboration, and more effective utilization of the resources allocated to a given project.
These benefits can significantly impact the success of your various projects by stripping the complexity and “gray areas” from your project management processes and strategies and replacing them with data-driven frameworks designed to generate smooth and replicable success.
Aligning your project with your organizational strategy also ensures every action taken within your organization contributes to the shared mission and vision identified by your corporate-level strategy.
KPIs, project milestones, and action plans can all be tailored to promote your company’s immediate success while setting the stage for accomplishing three, five, and even ten-year visions.
Set the Stage for Steady Success with Medallion Partners
Medallion Partners is a boutique executive search and organizational strategy firm with over 15 years of experience under our belt. Our top-notch experience, insights, and guidance have empowered countless businesses to align their efforts, resources, and progress with their short-term performance goals and long-term vision.
Our dedicated team of experts will guide you through every step of creating and implementing a comprehensive organizational strategy that positions your company to reach new heights. Let us help you turn your goals into reality – contact us today!