The daily plan created to aid in the implementation of corporate and business level plans is known as a functional level strategy. These strategies are developed in accordance with the directives provided by the top management.
The operational level of decision-making, also known as tactical decision-making, for various functional domains like production, marketing, research & development, finance, people, and so forth is the focus of the functional-level strategy.
Since these decisions are made in the context of corporate strategy, strategists give functional-level managers appropriate guidance and recommendations regarding the plans and policies that the company should choose, ensuring successful implementation.
Functional Strategy’s Function
- Offering information on the administration of corporate activities, aids in the overall business plan.
- It describes how functional managers should operate in order to provide better results.
The functional strategy lays out what must be done, how it must be done, and when it must be done at the functional level, serving as a roadmap for the functional staff in the end. In order to do this, strategies must be broken down into manageable plans and policies that complement one another. Therefore, the strategy can be implemented by the functional managers.
Functional Business Areas
The following list of functional business areas is a sample of those where strategic decision-making is necessary:
Marketing strategy: Marketing entails all actions related to determining client needs and attempting to meet those needs with the goods and services they require in exchange for money. The marketing mix is the most crucial element of a marketing plan since it includes all the actions a company can take to raise demand for its goods. Product, pricing, location, advertising, personnel, method, and tangible proof are all included.
Prior to establishing a marketing plan, a thorough SWOT analysis of the company’s circumstances is performed. It consists mostly of three components: planning, carrying out, and controlling. There are several distinct strategic marketing strategies, including demarketing, differential marketing, augmented marketing, direct marketing, person marketing, location marketing, relationship marketing, Synchro marketing, concentrated marketing, service marketing, and marketing by people.
Financial Strategy: A financial strategy covers all aspects of managing the company’s finances, including planning, obtaining, utilizing, and regulating its financial resources. This includes obtaining funding, developing budgets, determining the sources and use of finances, making investments, acquiring assets, managing working capital, paying dividends, figuring out the company’s net worth, and so forth.
Human Resource Strategy: Human resource strategy refers to how a company fosters the growth of its employees and offers them the opportunity and working environments necessary for them to contribute to the company as a whole. This also refers to choosing the most qualified worker for a specific job or task. It plans out all HR-related tasks like hiring, training, inspiring, keeping employees, and labor relations.
Production Strategy: The overall manufacturing system, operational planning and control, logistics, and supply chain management are the main areas of concentration for a company’s product strategy. Enhancing quality, expanding output, and lowering production costs are the three main goals of the production plan.
- There are three Research and Development methods for executing strategies:
- being the first business to release a cutting-edge product.
- being a creative imitator of a successful product
- to make goods at a low cost.
- Strategies at the functional level emphasize hiring specialists and merging tasks within the functional domain.
