Understanding the Importance of Business Strategy Hierarchy in Successful Companies

Introduction

Business strategy hierarchy refers to the process by which a company creates a strategic plan to achieve its long-term objectives. It involves defining the company’s vision, mission, and values, and then developing a roadmap to achieve them. In this article, we will discuss the importance of business strategy hierarchy in successful companies, and how it can help them achieve their goals more effectively.

The Three Levels of Business Strategy Hierarchy

There are three levels of business strategy hierarchy: corporate strategy, business strategy, and functional strategy. Corporate strategy is the highest level and involves the overall direction of the company. Business strategy is the second level and focuses on how a company will compete in a specific market. Functional strategy is the lowest level and involves specific operational goals.

For example, Microsoft’s corporate strategy is to empower people and organizations around the world to achieve more. Their business strategy is to focus on delivering innovative software solutions in a variety of areas such as gaming, cloud services, and productivity. Their functional strategy focuses on developing the specific software products that contribute to their business strategy.

Why is Business Strategy Hierarchy Important?

Business strategy hierarchy is important for several reasons. First, it helps companies align their goals and objectives at all levels of the organization. This alignment ensures that everyone is working towards the same vision and mission, which can increase effectiveness and efficiency. Second, business strategy hierarchy allows companies to make informed decisions about resource allocation. By understanding the bigger picture, companies can make decisions about which projects to prioritize and which to delay or cancel.

Finally, business strategy hierarchy helps companies to adapt to changes in the market and industry trends. By continually reassessing their strategic plan, companies can make changes when necessary to remain competitive. Additionally, having a clear strategic plan can help companies weather economic downturns or other challenges that may arise.

Examples of Successful Companies with Strong Business Strategy Hierarchy

One example of a company with a strong business strategy hierarchy is Amazon. Their corporate strategy is to be the world’s most customer-centric company, with a focus on long-term value creation. Their business strategy is to offer a wide range of quality products and services at competitive prices. Their functional strategy focuses on innovation, supply chain management, and customer service.

Another example is Walt Disney. Their corporate strategy is to create entertainment that inspires and captures the imagination of people worldwide. Their business strategy is to focus on creating family-friendly theme parks, movies, and television shows. Their functional strategy focuses on creating high-quality content that appeals to a wide audience, as well as attention to detail and exceptional customer service.

Conclusion

In conclusion, business strategy hierarchy is essential for the success of any company. By creating a clear and concise strategic plan that is aligned at all levels of the organization, companies can achieve their goals more effectively and efficiently. Maintaining a strategic plan and regularly reassessing it can help companies adapt to changes in the market and industry trends. By following the examples of successful companies with strong business strategy hierarchies, businesses can achieve success in their own industries.