Strategy in Business: Common Strategy Features and Levels - 2021

In business, a strategy outlines a company's plan to put itself in a competitive position to achieve its immediate and long-term business goals. Strategies help merge the idealism of a [mission statement](https://www.masterclass.com/articles/how-to-write-an-effective-mission-statement-in-3-steps) with the decision-making realities of everyday operations within a specific business model. Strategies are a roadmap explicitly tailored to a small business or company so that their working plans are customized to the unique conditions of their competitive market. Some companies utilize the [Five Forces analysis](https://www.masterclass.com/articles/how-to-use-porters-five-forces-analysis-to-create-a-business-strategy), created by Harvard Business School professor Michael Porter in 1979, to shape their strategy. The analysis helps businesses evaluate the competitive forces at play in their industry and engage in strategic planning that accounts for the specifics of their industry structure and the relative power of suppliers and buyers. He encouraged businesses to look beyond their direct industry competition and conduct comprehensive industry analysis to get a complete picture of their growth capabilities. While every corporate strategy is different, most include the following basic characteristics: 1. __Stated business objectives__: A great business plan includes a list of goals that can be short-term, medium-term, or long-term. Short-term goals include formally incorporating, hiring a corporate-level team, drafting a vision statement, and selling the first batch of products or services. Medium-term goals might consist of launching a new technology or new products, claiming a certain percentage of market share, developing a smartphone app, or topping customer satisfaction surveys. Long-term goals might include objectives like an [initial public offering](https://www.masterclass.com/articles/initial-public-offering-guide) (IPO), hitting a specific revenue target, purchasing a competitor, or being acquired by a large firm. 2. __Self-assessment__: Part of the strategic planning process is taking a hard look at the organization as it presently exists. Do you have the cash flow and human resources needed to see your plan to fruition? What competitive advantages do you enjoy over other brands? Business professionals often call this a [SWOT analysis](https://www.masterclass.com/articles/how-to-use-swot-analysis-to-make-business-decisions), which stands for "strengths, weaknesses, opportunities, threats,” and can help analyze a company’s operational effectiveness and core competencies. 3. __Target market-identification__: Another important feature of a strategy is that it identifies the type of people who will consume your service. A well-crafted business strategy will identify whether another brand is currently serving these potential customers, how they might be peeled away from that brand, and what they would need in return for their customer loyalty. These will inform your marketing efforts down the line. 4. __Strategic management plans__: A good strategy also includes the business plans your company will use to achieve its business objectives within the [target market](https://www.masterclass.com/articles/target-market-guide) you've identified. The plan will also feature the brand's marketing strategy, competitive strategy (possible revenue streams), and growth strategy (plan to claim existing markets and reach customers in new markets). The goal is to chart a strategic direction such that all business activities serve the fulfillment of the brand's business objectives. There are a few different levels to every strategy, including: 1. __Operational strategy__: Companies implement operating strategies to help achieve their objectives. This plan helps organize smaller sections of a business into their most efficient form and analyze their contribution to the larger strategy. 2. __Functional strategy__: A functional strategy is a short-term focus on inventory, marketing, or finance to maximize productivity and resource allocation. 3. __Business strategy__: A business strategy identifies all the ways a company can compete and excel within a target market. It involves product development, vertical and horizontal integration, and methods to gain an advantage over market rivals. 4. __Corporate strategy__: Corporate strategy is an umbrella term that consists of all the smaller levels of strategy. A corporate strategy is often created at the top level of management. It encompasses a company’s business direction, like their long-term objectives or product lines, and how to deliver to stakeholders or investors. Get the [MasterClass Annual Membership](https://www.masterclass.com/) for exclusive access to video lessons taught by business luminaries, including Sara Blakely, Chris Voss, Robin Roberts, Bob Iger, Howard Schultz, Anna Wintour, and more. Effective strategy development can make it possible for companies to thrive in a competitive environment. A business can be prepared for a fluctuating market’s highs and lows with a solid strategic plan in place.