Accounting technicians scheme west africa
F.6.5b Divisional Strategy
Download 3.37 Mb. View original pdf
|
- Navigate this page:
- Basis Corporate strategy Divisional/Business strategy
| F.6.5b Divisional Strategy Most large-scale business organization typically have multiple business units or departments that are spread out across the different businesses and markets that the organization has decided to operate in. A strategic business unit may include a product division or any other profit center, the objectives of which maybe different from the rest of the business units of the organization. A strategy developed at this level is known as divisional or business strategy, the purpose of which is to determine the ways in which an organization plans to accomplish its goals in a particular business unit. Business level strategies area step below the corporate level strategies. These strategies focus on more specific areas of the organization. Three strategies are usually executed in this level, which include differentiation, cost leadership and focus. The purpose of these business level strategies is to create a competitive edge for the organization. The strategies developed at the business level are used by managers of business units or divisions to determine solutions for problems that they face in their routine activities. 184 Table 3.1: Differences between corporate strategy and business strategy Basis Corporate strategy Divisional/Business strategy Meaning Developed to offer directions to the business for accomplishing their long-term objectives Developed at the business unit level to determine the ways in which the objectives of these units can be achieved. Developed by Top-level management CEO, Board of Directions, Managing Director Middle-level management Department, Division or line managers Strategic decision Analytical and value-oriented decisions, aiming to achieve organizational growth and profit maximization Decisions regarding activities to stay ahead of the market competition Strategic formulation Formulated at the organizational level Formulated fora particular business unit or division Team Formulates long-term solutions for the organization Formulates relatively short-term solutions for routine issues faced in the organization short- term Focus Making decision regarding the business that the company should pursue Decide upon the business plan that the company should adopt to compete successful in the market Examples Expansion, downsizing and stability Cost leadership, differentiation and focus Download 3.37 Mb. Share with your friends:
|