Are you struggling to identify and implement the rightorganizational strategyfor your business?
With so many different types of strategies to choose from, it can be challenging to know where to start. And let’s be honest – the stakes don’t make choosing an organizational strategy any easier.
Get it right, and you’ve set your company up for long-term growth and success. Get it wrong? Well…you could create harmful inefficiencies, damage company morale, harm your brand image, and miss out on valuable growth opportunities.
Today, we’ll help you take the first step toward discovering the ideal organizational strategy by breaking down each of the five types of organizational strategies and providing real-life examples of their effectiveness.
From competitive-level strategies that identify and maximize competitive advantages to operating-level strategies that promote efficiency and minimize expenses, we’ve got you covered. So let’s get started!
What Are the Types of Organizational Strategies?
There are five primary types of organizational strategies. Each of these types of strategies focuses on a different “level” of business development and is often used in conjunction to create powerful synergies that position businesses to spark steady and sustainable success that steadily brings them closer to their three, five, and even ten-year goals. The five levels of organizational strategies include:
- Competitive-level strategy
- Corporate-level strategy
- Business-level strategy
- Functional-level strategy
- Operating-level strategy
While each of these types of organizational strategies has the potential to revolutionize a business’s success, business leaders that implement these different types of organizational strategies without a strong grasp on their differing strengths and weaknesses can actually end up stunting their company’s growth.
A poorly chosen or implemented organizational strategy can lead to issues like misaligned employee efforts, unclear priorities, poorly allocated resources, inefficient processes, siloed communication, stunted collaboration, and plummeting employee morale.
To help you avoid this laundry list of consequences, we’re going to break down each of the five types of organizational strategies. Ready? Let’s go!
Competitive-Level Strategy
Competitive-level strategy revolves around creating a systemic approach to identifying and maximizing competitive advantages as they emerge in your industry, market, or niche.
The aim of the competitive-level strategy is to create a strategic framework that positions your entire organization to efficiently and effectively align its efforts and resources in a new direction to take advantage of emerging opportunities before your competition has a chance to identify them.
When implemented successfully, organizations can reliably capture increased revenue and market share and boost their brand image by anticipating the needs and desires of their target customers and providing a high-quality, “first to market” solution.
Due to its predictive nature, competitive-level strategy requires robust customer research, market analysis, and trend forecasting. However, the investment in developing these capabilities will be well worth the climbing sales and growing customer base you’ll generate with an effective, data-driven competitive-level strategy.
Competitive level strategy is a great choice for companies in fast-paced, highly competitive industries like:
- Manufacturing
- Retail
- Service
- Hospitality
- Technology
- Education
- Healthcare
Corporate-Level Strategy
Corporate-level strategy provides a high-level, overarching plan for defining an organization’s stances on matters like mergers and acquisitions, resource allocation, growth investments, portfolio management, codifying organizational hierarchies, creating synergies between business units and departments, and aligning priorities from the C-suite down to fresh interns.
Unlike the othertypes of organizational strategies, corporate-level strategy is only concerned with the “big picture.” Rather than aiming to maximize short or medium-term advantages like competitive-level strategies, corporate-level strategies aim to optimally position an organization to accomplish its long-term goals while fulfilling the mission, values, and vision that make your company unique.
Corporate-level strategy is particularly important for companies considering restructuring, expanding into new markets or geographical areas, differentiating their products or services, or supply chain or distribution vertical integration strategies.
Business-Level Strategy
Business-level organizational strategy provides guidelines for systemically capitalizing on competitive advantages within your market, industry, or niche.
Business-level strategies typically focus on answering important questions such as how to achieve product differentiation, attain cost leadership, provide direction for marketing strategies, and create a unique value proposition that aligns with your company’s mission, vision, and values while being compelling to customers.
Functional-Level Strategy
Functional-level organizational strategies revolve around determining how particular departments within your company will contribute to the goals, initiatives, and changes created by higher-level organizational strategies.
Functional-level strategies should be tailored to each of your major departments. In action, that may manifest as:
- New target demographics for Marketing to target
- New sales scripts for your Sales department to implement
- New financial reporting tools or systems for Accounting
- And new talent targets for H.R. and Recruitment
Operating Level Strategy
Operating level strategies are designed to promote smooth, streamlined implementation processes for new policies, strategies, and initiatives sparked by competitive, corporate, business, and functional level organizational strategies.
Operating level strategies aim to maximize efficiency, minimize expenses, and promote strong performance in areas like:
- Supply chain management
- Inventory control
- Quality control
- Project management
- Production planning
Organizational Strategy Examples
Now that you have a solid understanding of the five main types of organizational strategies let’s take a look at a couple of real-life examples.
Disclaimer: It’s important to note that identifying the ideal organization for your company should be a measured and data-driven decision. There’s no such thing as “one-size-fits-all” when itcomes to organizational strategy.
Focus Organizational Strategy
One of the most common examples of a competitive-level strategy is a focus strategy. Focus strategies aim to identify underserved niches within a particular market, then refine sales, marketing, and offerings to appeal to and capture said market.
By narrowing the scope of their business efforts, organizations that pursue a focus strategy can rapidly gain market share and achieve lucrative brand recognition and customer loyalty from valuable subsets of their industry.
Focus strategies are typically implemented by companies interested in breaking into industries dominated by well-established organizations, like automotive manufacturing, conglomerates, healthcare, energy, and hospitality.
Cost Leadership Organizational Strategy
Cost leadership is an example of a business-level organizational strategy that aims to maximize sales, market share, and customer loyalty by becoming the lowest cost-producer in your industry, market, or niche.
Cost leadership strategies accomplish this goal by aggressively slashing expenses across the board. From procurement and production to distribution, marketing, and sales, companies pursuing cost leadership meticulously review and refine their spending to create the highest possible profit margin while providing product and service prices that attract price-sensitive shoppers in their market.
Businesses like Walmart, Amazon, and Mcdonald’s have all successfully leveraged cost leadership strategies into billions of dollars of revenue and a dominant position in their market.
How to Teach Organizational Skills
The importance of teaching organizational skills can’t be overstated when discussing strategies for maximizing productivity, efficiency, and success. Check out these five skills you can begin teaching your employees today to promote strong organizational skills in your company.
- Prioritization: Prioritization is an essential skill for workers, whether they’re operating independently or as a part of a team. Teaching your staff how to identify emerging priorities and how to use simple tools like to-do lists and calendars to see them through to completion can significantly boost productivity, efficiency, and employee success.
- Time management: Time is an invaluable resource. Ensure your organization is maximizing its value by teaching your teams to effectively manage their time using practical goal-setting, reliable accountability tools, focus aids that minimize distractions and time-blocking techniques.
- Delegation: Delegation increases efficiency, fosters teamwork, boosts productivity, and empowers employees with a higher degree of autonomy and decision-making power – two key elements to employee engagement, retention, and job satisfaction.
- Communication: Effective communication is a foundational organizational skill. Teaching your employees how to actively listen, clearly and concisely communicate, and provide actionable feedback to their colleagues and clients will generate better business outcomes that lead to everything from higher revenue to heightened brand loyalty.
- Continuous improvement: Teaching your employees how to continuously improve and refine their organizational skills ensures their prioritization, time management, delegation, and communication skills stay sharp. It also positions your staff to uncover new and improved methods of organization, leading to better business outcomes across departments.
Let Medallion Partners Build You a Winning Organizational Strategy
Medallion Partners knows what it takes to get your business to the next level.
With over 15 years of experience helping businesses succeed across a wide range of industries, our expert strategy consultants can help you identify andimplement the perfect organizational strategy for your company.
Whether you’re looking to improve efficiency, increase productivity, or cultivate a culture of innovation, our world-class team has the knowledge, drive, and expertise to guide you every step of the way.Contact us todayto learn more about how we can help your business thrive.
