QS Study

Differentiate between Business level strategy and Functional-level strategy

Business level strategy: Business level strategy refers to the managerial game plan for a single business. It concerns the actions and the approaches to producing successful performance in one specific line of business.

Functional level Strategy: Functional strategy refers to the managerial game plan for a particular functional activity, business process, or key department within a business. For example, a company’s marketing strategy represents the managerial game plan for running the marketing part of the business.

Differences between them are as follows:

Business level strategy system

  • Focus: Business level strategy concerns the whole of an organization or division. Its focus is on all the operations of an organization or unit.
  • Nature: In Business level strategy psychological considerations are dominant. There are very little rules and a high degree of judgment or subjective decision men are involved.
  • Time Horizon: Business level strategy involves weekly, monthly, or yearly time frames.
  • A degree of Difficulty: Control is more difficult in Business level strategy than in Functional level Strategy due to the lack of a scientific standard with which actual performance can be compared.
  • Type of Data Used: A management control system is usually built around financial data.
  • Analogies: These analogies do not work well with management control system.
  • Techniques: Business level strategy system depends on information management system (MIS) and decision support system (DSS) as its activities are not programmable.

Functional level Strategy system

  • Focus: The focus of the Functional level strategy is limited to a single task or operation.
  • Nature: A Functional level Strategy, a system is a rational system because the action to be taken is decided by a set of logical rules.
  • Time Horizon: The time horizon of Functional level Strategy tends to be day-to-day.
  • The degree of Difficulty: Control is easier.
  • Type of Data Used: Functional level Strategy dam are open non-monetary,
  • Analogies: In Functional level Strategy systems, analogies within technical, electrical and hydraulic systems are reasonable and useful.
  • Techniques: Operations Research (OR) techniques are widely applied in Functional level Strategy because the activities are programmable.