What is Business Level Strategy & Why is it Important?
Table of Contents
- Jaro Education
- 21, May 2025
- 4:00 pm
In this business world, it is essential to have a strong business strategy for growth and achievement. To gain success, business leaders should enhance their skills and set clear business growth strategies that are valuable for the organisation, customers, dealers, and employees. Business strategy involves positioning, resource allocation, and long-term plans to help gain success in a dynamic market. So, let’s explore business-level strategy, including its definition, types, and importance.
What is Business Strategy?
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Business level strategy is defined as a well-structured plan of actions and decisions that allows an organisation to achieve its specific goals and benefits in the market. It includes a SWOT analysis, a strategic planning tool that helps organisations understand their present condition by analysing their strengths, weaknesses, opportunities and threats. Additionally, it helps allocate resources excellently so that it coincides with the organisational goals and adapts to rapidly changing market conditions. A business level strategy mainly aims to create a unique position in the dynamic market that ensures sustainable growth and success.
Types of Business Level Strategy
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Now that you know the business strategy definition, let’s understand the types of business-level strategy with examples.
Cost Leadership Strategy
Cost leadership is a type of business-level strategy that focuses on offering products at a lower price in the industry than competitors. For successful cost leadership, organisations usually utilise economies of scale and various strategies, such as enhancing facilities, investing in tools, minimising overhead costs and reducing costs. So, the main aim of cost leadership is to get the lowest cost for your product or service while maintaining profitability.
Example: For instance, Maruti Suzuki India Limited, an automobile manufacturer, employs a cost leadership strategy by manufacturing several budget-friendly cars in this competitive automotive market.
Differentiation Strategy
Differentiation strategy focuses on developing products or services that provide more value to customers. By adopting this strategy, companies highlight their exclusive features, higher quality, excellent services or brand uniqueness to differentiate themselves from their competitors. This type of strategy allows businesses to attract those customers who can pay high for special products and services.
Example: To take an example, Titan Company Ltd., a leading lifestyle company in India, focuses on a differentiation strategy by producing several watches that come with a combination of quality and innovative designs at different prices.
Focused Cost Leadership Strategy
In this strategy, companies target a specific marketplace by offering low-cost products tailored to that section. They can achieve cost leadership within their chosen niche by being more efficient than their competitors.
Example: Bata India, a well-known footwear company, implements a focused cost leadership strategy by offering reasonable, durable footwear targeted at cost-effective customers.
Focused Differentiation Strategy
Focused differentiation focuses on targeting a specific market segment with unique products or services. This strategy allows businesses to impose premium prices for their specialised services.
By adopting this strategy, companies attract consumers who are willing to pay higher amounts for specialised products. To be successful in this strategy, businesses need to understand the niche market and deliver particularly valuable products.
Example: Amul, a renowned dairy cooperative in India, focuses on differentiation strategy by offering various dairy products to different customer segments. By providing its innovative and diverse products, including specific dairy items for health-conscious people and premium dairy products for discerning customers, Amul effectively serves different market segments while maintaining its quality and consistency.
Why is Business Level Strategy Important?
When you start a business, it is crucial to know the importance of business planning and strategy to ensure the sustainable growth of the organisation. So, here are some reasons why business-level strategy is important.
Competitive Benefits
Business-level strategy allows an organisation to recognise its unique strengths and proficiencies in the market, setting it apart from competitors. By considering these differentiating factors, the company can generate competitive benefits by offering valuable services to customers that can’t be effortlessly replicated by its competitors.
Resource Allocation
Business planning and strategy are crucial in the resource allocation process. If resources are allocated as per the aligned strategic goals, then the company works more efficiently. Therefore, resource allocation is utilised in a manner that prevents consumption and allows the company to accomplish its goals more proficiently.
Sustainable Growth
Proper business planning and strategy consider the long-term sustainable growth of an organisation, reflecting market trends, developing technological innovation, prioritising sustainable practices and altering customer preferences. By implementing business growth strategies, a company can maintain long-term success and avoid the downsides of rapid, unsustainable development.
Informed Decision-making
A strong business-level strategy offers decision-makers an agenda for assessing choices. When decisions are associated with the strategic direction, they directly help achieve the long-term goals of the company in a specific market. Depending on data, analysis and understandings, this process ensures that decisions integrate into the company’s planned goals.
Employee Alignment
Business strategy communication helps employees understand their role and support in attaining the organisational goals. This approach makes them more motivated, productive and engaged when they feel their work impacts and contributes to the company’s vision.
Adaption to Change
As the business environment is changing exponentially, having a well-defined business-level strategy is important. It helps the company to expect changes in the market, technology, consumer behaviour and competitive activities. This approach allows the company to quickly adjust its development with a strategic agenda.
Customer Focus
For a successful business, it’s important to understand and meet customer needs. Whether it’s quality, cost, innovation or service, by focusing on customer requirements, companies can improve customer satisfaction. This approach not only manages sales but also improves a strong reputation, making the company a preferred choice in the industry.
Levels of Business Strategy
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Business strategy is generally categorised into three primary levels, which include:
Corporate Level Strategy
Created by the top management of a company, a corporate-level strategy is a long-term, action-orientated, comprehensive and integrated plan. It helps determine business lines, growth, takeovers, mergers, modifications and integrations.
Business Level Strategy
A business level strategy is related to a specific business. It is generally developed by a company’s general managers, who transform mission and vision into actual, clear and result-driven strategies. This strategy is designed to gain competitive benefits in a specific market by creating unique value for customers, differentiating from competitors and allocating resources.
Functional Level Strategy
Developed by a company’s department heads or supervisors, the functional level strategy focuses on specific plans, actions and decisions at the operational level regarding functional areas, such as marketing, operations, human resources, research and development and finance.
Conclusion
A business-level strategy not only helps keep the organisational goals planned and focused but also saves valuable time and money. With the rapid change in the business world, the demand for business strategy has increased, and most organisations use business growth strategies to achieve their planned goals. Therefore, by executing the right business planning and strategy, organisations can create competitive benefits, maximise opportunities and gain sustainable growth.
If you want to upskill your career in business strategy management, then enroll in the Information Technology Management for Strategic Business Leadership: A Programme for Future CIOs and CTOs offered by IIM Ahmedabad in strategic partnership with Jaro Education. This is a 6-month duration course that helps you learn business concepts and integrate them into the larger organisational agenda. So, apply now and take your career to the next level!
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