What Is The Importance Of Organizational Strategy?
What Is The Importance Of Organizational Strategy?
Organizational strategies are roadmaps organizations create to outline how they will approach and accomplish goals and objectives.
From allocating resources, identifying growth opportunities, improving daily processes, and eliminating operational bloat, organizational strategies solve many businesses’ most pressing problems.
Organizational strategies provide valuable decision-making frameworks that make tough decisions like pursuing growth opportunities, planning investments, and adjusting to ever-changing market conditions, a systematic, efficient process.
Effective organizational strategies streamline decision-making, smooth changes to policies and procedures, and provide a framework for tackling challenges without putting long-term goals at risk.
What Are The Different Types Of Organizational Strategies?
There are a wide variety of organizational strategies businesses can leverage into operational stability, higher revenue, and long-term success.
But organizational strategies, like most effective business tactics, aren’t one-size-fits-all. For the best odds of success, companies must weigh the pros and cons of each type of organizational strategy to determine which type most closely aligns with their company culture, organizational structure, and long-term goals.
Organizational strategies can broadly be divided into five main categories:
- Competitive Strategies
- Corporate Strategies
- Business Strategies
- Functional Strategies
- Operational Strategies
Each organizational strategy style focuses on different aspects or levels of a business’ processes, tactics, resource allocation, and growth opportunities.
Competitive-level strategies center around finding new ways to gain an edge over close competitors. Competitive strategies seek to identify and leverage strengths while capitalizing on the weaknesses of competitors to win greater market share, drive revenue and profitability, and promote strong customer loyalty.
Corporate-level strategies are more “big picture” than competitive-level strategies and are responsible for setting a comprehensive agenda, roadmap, or direction for an entire organization.
Corporate-level strategies are essential for long-term growth because they empower organizations to make agile, effective pivots and expansions that diversify revenue streams and capture new markets.
Business-level strategies are still larger-scale tactics, but they primarily revolve around implementing strategies developed at the corporate level.
For example, suppose an organization chooses to pursue a corporate-level strategy of targeting a new consumer demographic to increase market share. In that case, the business-level strategies developed in response may include tasks like:
- Conducting extensive market research.
- Gathering feedback from existing customer surveys.
- Analyzing consumer behavior trends to guide upcoming marketing campaigns.
Functional-level strategies refine business-level strategies even further. Functional-level strategies refer to the actions and goals passed to specific organizational departments to support corporate and business-level initiatives.
A business implementing an organizational strategy centered around promoting a new product could lead to functional-level strategies like:
- The marketing department conducting new customer research to identify pain points for promoting the new product.
- The sales department updating their scripts to include the new product.
- Production adjusting manufacturing processes and material inventory to account for upcoming orders of the new product.
Operating-Level Strategies revolve around the “ground-level” strategies for implementing competitive, corporate, business, and functional-level strategies at the ground level. Operating-level strategies can include:
- Updating marketing and sales materials to reflect new endeavors.
- Adjusting raw material inventory to support the sale of a new product.
- Evolving delivery methods to support customer loyalty initiatives.
What Is The Importance Of Strategic Management?
Strategic management provides a laundry list of benefits for organizations that implement the philosophy effectively.
Strategic management refers to the idea that companies can maximize profits, operational efficiency, customer satisfaction, market share, and more through a proactive approach to management that goes beyond handing down marching orders and waiting for the results at the end of the quarter.
Strategic management promotes constantly monitoring, evaluating, and refining business strategies and processes to safeguard growth and provide a clear path forward by uncovering operational inefficiencies that prevent organizations from winning more customers and growing in their markets.
Strategic management has become essential for organizations that want to stay ahead of shifting market conditions.
What Are Some Examples Of Organizational Strategies?
While the right organizational strategy varies from company to company, several popular strategies include:
- Horizontal Integration
- Vertical Integration
- Market Expansion
- Cost Reduction
- Focus Strategies
- Product or Service Innovation
How Medallion Partners Helps Your Company Create an Airtight Organizational Strategy
Creating an organizational strategy that steers company growth while remaining agile in an ever changing marketplace is not always easy. But for over 15 years, Medallion Partners has been helping organizations across industries do just that.
We don’t give you a one-size-fits all formula. We help you ask the right questions to define the goals that are right for your company. Then we help you create a strategy to execute on those goals over the long-term.
If you’re ready to create a long-term organizational strategy for your company, contact Medallion Partners today.