What Are the 5 Organizational Strategies?
March 24, 2023
Organizational strategies are an essential growth asset for businesses across industries. But which organizational strategy is right for your business? Answering this question can make or break the long-term success of your company, so it’s worth careful consideration!
In this blog, we’ll break down the five most popular – and successful – types of organizational strategies that can be applied to almost any growing organization.
What Are the 5 Organizational Strategies?
Businesses can deploy several types of organizational strategies to establish a roadmap to success.
Choosing an organizational strategy that supports your long-term goals, aligns with your company culture, and meshes well with your managerial structure and style is essential. Pursuing the wrong organizational strategy can hinder growth, harm morale, and waste valuable time and resources.
So, how do you choose?
First, you gain a solid understanding of the five most popular organizational strategies, including:
- Competitive Strategy
- Corporate-level Strategy
- Business-level Strategy
- Functional-level Strategy
- Operating-level Strategy
Competitive Strategy
Competitive strategies are all about – well, competition! This style of organizational strategy hinges on identifying your organization’s unique strengths as well as your closest competitors’ most glaring weaknesses.
After successfully uncovering potentially lucrative gaps in your competitors’ strategies, competitive organizational strategies position your business to attack and dominate said spaces, leading to increased market share, new revenue streams, and 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.
Corporate Level Strategy
Corporate-level strategies are “big picture,” overarching plans that provide a framework for your company’s philosophy regarding business unit management, including resource allocation, growth investments, and operational processes and policies.
Corporate-level strategies are also essential tools for prioritizing competing goals and establishing a realistic, replicable roadmap for accomplishing them. Examples of corporate-level strategies include:
- Expansion
- Retrenchment
- And Vertical and Horizontal Integration strategies
Business Level Strategy
Business-level strategies are more specific than corporate-level strategies and focus on establishing processes and roadmaps for implementing the broad-stroke adjustments sparked by new corporate-level initiatives and objectives.
Business-level strategies outline how your business will approach competition in arenas like:
- Pricing
- Marketing
- Product Quality
- Brand differentiation
- Customer experience
A typical example of business-level organizational strategies in action is cost leadership.
Cost leadership is a business-level strategy that seeks to maximize sales (and profits!) by meticulously “trimming the fat” to become the lowest-cost producer in your industry or market. In turn, your business will be able to promote your products and services at a new, lower price point that captures customers who might have otherwise gone with a competing alternative.
Functional Level Strategy
Functional-level strategies are concerned with how a particular department within an organization can contribute to the company’s overall strategy.
Functional-level organizational strategies exist to provide a roadmap for implementing competitive, corporate-level, and business-level strategies. As their names suggest, functional-level organizational strategies revolve around identifying and optimizing the various departmental functions needed for higher-level strategies to succeed.
In action, a solid 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
Operational Level Strategy
Operational-level strategies cover your company’s roll-out or implementation process for competitive, corporate, business, and functional strategy changes. Operational-level organizational strategies aim to create smooth, replicable, and communicable processes for implementing, evaluating, and iterating modifications to your company’s procedures, policies, and goals.
Operational-level organizational strategies lay the groundwork for optimizing essential tasks like:
- Quality control
- Inventory control
- Production planning
- Project management
- Supply chain management
Importance of Organizational Strategy
Leveraging organizational strategies empowers your business to operate at peak efficiency, productivity, and focus.
By using the frameworks provided by organizational strategies to tackle tough business decisions – like allocating funds, time, and employee efforts – organizations can ensure each decision made advances the organization closer to its long-term goals.
Businesses can also lean on organizational strategies to ensure they don’t stray away from their values and mission while pursuing higher sales, stronger profitability, and steady growth.
How Medallion Partners Can Help
Creating a plan for your business can be daunting and difficult. Don’t go at it alone. With years of experience and a mind for strategy, Medallion Partners is an organizational strategy consulting firm that can help you future-proof your organization with a rock-solid plan.
Don’t leave your future to chance – contact Medallion Partners today, and let’s work together to find the right solution for your business.