Corporate-level strategy deals with the “overall scale and scope of the organisation”, whilst business-level strategy covers the “how to” in remaining and maintaining its product market leadership position and lastly the functional level strategy addresses “how to deliver” on the mentioned two strategies. (Louw & Venter, 2011). Corporate level strategy deals with the overall scale and scope of the business as a means of maximising shareholder value. Corporate level strategies takes place at head office where decisions is taken by top management and shareholders and addresses how value is created by the different business units in the portfolio of the company. This includes the number of products and services that the company will offer and the markets which will be pursued by the business units in the portfolio. (Louw & Venter 2013:19-20). The alignment between business units and the corporate (parent) office is addressed by the corporate level strategy and aimed at growing or defending the business. (Louw & Venter 2013:330). The corporate level strategies are: growth strategies which attempts to increase the organisations size through increased sales. Examples of growth strategies are concentration, integration, diversification, mergers and acquisitions. A stability strategy attempts to hold or maintain the organisation’s present size or to grow slowly. A turnaround strategy is an attempt to reverse a declining business as soon as possible. An organisation can consider combining the above mentioned strategies for different lines of business in the organisations. The focus is on creating shareholder value. Therefore the most appropriate strategy is dependent on the strategic fit between the organisations internal strengths, capabilities and resources and the opportunities available in the external environment. Example of Internal growth strategies is Woolworths. Choices made on the basis of products and markets have successfully contributed to the company achieving its growth objectives. An example of external growth strategies is the Virgin Group who achieved growth through unrelated diversification when they first came to South Africa in 1996 and launched Virgin Atlantic. Today it operates six core companies, namely: Virgin Active, Virgin Mobile, Virgin Money, Virgin Atlantic, Virgin Life Care and Virgin Limited Edition.
Business level strategy supports the corporate level strategy by focusing on the ‘how’ a company intends to compete within a respective industry to achieve its goals, and attain a competitive advantage in the market through its resources, capabilities, skills base and competencies to create customer value. The link between internal capabilities and external relationships are important. (Louw ; Venter, 2013: 19-20). The most significant differences among competitive strategies are: whether an organisation target market is broad or narrow, whether the organisation is pursuing a competitive advantage linked to low cost or product differentiation, or a combination of the above. Four distinct generic competitive strategies are: overall cost leadership (maintain a lower overall cost base to gain a competitive advantage), differentiation (uniqueness of product or services), focus (niche markets or specially developed products) and best value cost provider (lower prices and to ensure product or service value is maintained against that of the competitors) strategy. An example of a focus strategy is Pep Store, who are known for overall cost leadership in all the product categories they offer. Another example is Unilever, who aim to serve several market segments by offering different products to different markets. Focus and cost leaderships strategy – . Apple has outsourced their production to reduce their operating cost to third party through vast economies of scale. Apple focuses on user interface and industrial design to making a product that not only the highly innovative but also the user-friendly and stylish in nature. Apple has a command on higher price than average price due to highly personalised and people friendly devices. For example, Samsung introduced smartphones in the under R1000 price range to attract a younger and lower income market. Differentiation strategy – . Apple uses a differentiation strategy by presenting an outstanding design of its products, personalised services and high quality products. The easiness of product makes target market varying from beginner to proficient users. Apple must be capable of consistently reducing costs while adding differentiated features. For Example, Apple uses this strategy by offering smart-products (phones, tablets) at a premium price. Customers are willing to pay the premium price as they see the product as being unique.
Function level strategy supports the business level strategy through its functional departments, namely marketing, human resources, production, information systems and finance. (Louw ; Venter 2013: 19-20). In order for functional level strategies to be effective, supportive and consistent, the business level strategies must give clear direction. Decisions are taken by the heads of the respective functional areas and with the general manager at the business level. There must be synergy and cooperation between the functional areas in a business to achieve a competitive advance. (Louw ; Venter 2013: 19-20.) Examples of functional level strategies are human resources strategy on employment equity, marketing strategy on product positioning and financial strategy on profit management and dividend payments.
All members at the different levels within a company should understand the importance of the overall organisational strategy and its implications at their respective levels. This requires extremely effective communication throughout entire organisation.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.