Functional Level Strategy

Functional Level Strategy

The daily plan created to aid in the implementation of corporate and business level plans is known as a functional level strategy. These plans 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 different functional domains like as production, marketing, research & development, finance, people, and so forth is the focus of functional level strategy.

Since these choices are made in the context of corporate strategy, strategists provide functional level managers appropriate guidance and recommendations about the plans and policies that the company should choose, ensuring effective implementation.

Role of Functional Strategy

• It assists in the overall business strategy, by providing information concerning the management of business activities.
• It explains the way in which functional managers should work, so as to achieve better results.

Functional Strategy states what is to be done, how is to be done and when is to be done are the functional level, which ultimately acts as a guide to the functional staff. And to do so, strategies are to be divided into achievable plans and policies which work in tandem with each other. Hence, the functional managers can implement the strategy.

Functional Areas of Business

Marketing encompasses all actions related to identifying client requirements and attempting to meet those needs with the goods and services they need in exchange for money. The marketing mix is the most crucial element of a marketing plan since it includes all the actions a company may 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 detailed 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.

2. Financial Strategy

All the areas of financial management, i.e. planning, acquiring, utilizing and controlling the financial resources of the company are covered under a financial strategy. This includes raising capital, creating budgets, sources and application of funds, investments to be made, assets to be acquired, working capital management, dividend payment, calculating the net worth of the business and so forth.

Human resource strategy covers how an organization works for the development of employees and provides them with the opportunities and working conditions so that they will contribute to the organization as well. This also means to select the best employee for performing a particular task or job. It strategizes all the HR activities like recruitment, development, motivation, retention of employees, and industrial relations.

4. Production Strategy

A firm’s production strategy focuses on the overall manufacturing system, operational planning and control, logistics and supply chain management. The primary objective of the production strategy is to enhance the quality, increase the quantity and reduce the overall cost of production.

5. Research and Development Strategy

The research and development strategy focuses on innovating and developing new products and improving the old one, so as to implement an effective strategy and lead the market. Product development, concentric diversification and market penetration are such business strategies which require the introduction of new products and significant changes in the old one.

For implementing strategies, there are three Research and Development approaches:

• To be the first company to market a new technological product.
• To be an innovative follower of a successful product.
• To be a low-cost producer of products.

Functional level strategies focus on appointing specialists and combining activities within the functional area.