What is Business Unit Level Strategy?
By definition, a business unit (also referred to as a division or major functional area) is a part of an organization that represents a specific line of business and is part of a firm’s value chain of activities including operations, accounting, human resources, marketing, sales, and supply-chain functions. Business units and functional areas help a company organize itself internally. For example, a company may have several strategic business units that each sell different products or provide distinct services. As fully functional segments of a company, business units typically have their own strategic direction and vision.
When it comes to strategy, each business unit has a role to play in the company’s grand plans and enterprise strategy. Each line of business or sector must align with and contribute value to the primary corporate business strategy. In order to optimize results, strategy needs to be part of everyone’s responsibilities. As such, each business unit must develop its own business-unit strategy framework that will define how it will fulfill its part of the primary corporate strategy and make a distinct, value-added contribution to the organization’s long-term success.
What Are the Strategy Level Types?
There are three major strategy level types:
Corporate-Level Strategy: Concerned with the overall scope and direction of an organization across its various businesses. This includes diversification and vertical integration.
Business-Level Strategy: Focuses on competing successfully in individual markets or industries. This involves being an industry leader or differentiating a brand.
Functional-Level Strategy: Deals with optimizing specific departments or functions to support business-level strategy. This level of strategy can include areas like extensive advertising, brand management, and global distribution.
The Importance of Business-Level Strategy
Business-level strategy is important as it defines how a company competes in a specific market, which influences its competitive position and success. It helps differentiate the company from competitors, attract customers, and achieve a sustainable advantage.
How to Develop a Business Unit Strategy Framework
CMOE helps organizations worldwide become more proficient at setting strategy and thinking strategically throughout the organization: at the corporate level, the business-unit level, and even the department, team, and individual level.
Enterprise
Enterprise strategy is a clear and compelling direction for the organization, typically created by senior leaders. It is a “plan to win” and defines the long-term goals, objectives, and initiatives that will secure the future.
Business Unit
Business units determine which parts of the core, enterprise strategy the unit or division will contribute to directly and then formulates a unit or division strategy with their own supporting priorities. This where the division’s strategy intersects with the enterprise strategy. It creates a strategy within the company’s larger strategy. Business unit leaders are responsible for communicating a clear direction for departments, teams, and individuals as well as ensuring their functions adapt and evolve in a dynamic business environment.
Department
For strategy to be effective, it must be cascaded through the organization. Departments need to identify strategic connection points within the business unit’s strategy and formulate initiatives and plans they can operationalize and execute on.
Team
Teams too must have a line of sight to the department strategy that is in alignment with the business unit and enterprise. All team members need to be aligned on how the team will add value to the business and help create competitive advantage. Teams need to take responsibility for delivering results today, while formulating and executing on aligned strategies that shape a promising future.
Individual
People bring strategy to life and create the strategic edge businesses need to compete so individual need to define how they will contribute to the strategic priorities of their team. This creates the conditions for people to discover their personal connection to the firm’s future. Individual contributors at all levels need to think about the future in innovative and entrepreneurial ways, especially in their individual areas of responsibility.
It doesn’t matter if you are a leader or an individual contributor: you have to know how to work strategically in order to help move the enterprise or corporate strategic plan along.
The methodology in CMOE’s Strategic Leadership™ Workshop has been expressly designed for leaders who need to develop the ability to create and implement a strategic direction for their part of the business. CMOE also offers the Applied Strategic Thinking® Workshop, which is designed for team leaders and individual contributors who want to develop the ability to think proactively and capitalize on opportunities to make a strategic contribution to the enterprise strategy.
Our business unit strategy and strategic thinking programs and processes improve the strategic capability of the organization at all levels and enhance strategy alignment and effectiveness. No longer is strategy the sole responsibility of senior leaders; business-units must create their own strategic plans that align with and support the enterprise vision.
Why Choose CMOE’s Business Unit Strategy Workshops
Because every organization has different needs, the Strategic Leadership™ Workshop and the Applied Strategic Thinking® Workshop are available in a variety of learning formats designed to fit your specific needs.
Participants are exposed to real, actionable ways to become more strategic in every part of their work, and they have numerous opportunities to apply the concepts as they begin building strategy for their piece of the business.
