## Levels of Strategy

### The Three Levels

Strategy operates at three distinct levels within an organisation. Each level has a different scope, decision-maker, and time horizon.

Level	Scope	Who Decides	Focus
Corporate Level	Entire organisation / portfolio	Board, CEO, Top Management	Which businesses to be in; overall direction
Business Level	Individual business unit or SBU	Business Unit Heads, Divisional Managers	How to compete within a specific market
Functional Level	Specific function (marketing, finance, HR)	Functional Managers	How to execute the business-level strategy

### What Belongs at Each Level

Corporate Level decisions:

Adopting an SBU (Strategic Business Unit) structure
Mergers, acquisitions, diversification into new industries
Portfolio decisions (which businesses to grow, hold, or divest)
Defining the overall corporate mission and values

Business Level decisions:

Choosing a competitive strategy (Cost Leadership, Differentiation, Focus)
Pricing strategy (skimming vs penetration)
Building distribution partnerships
Deciding how to respond to competitors within the industry

Functional Level decisions:

Marketing campaigns
Hiring and training plans
Production scheduling
Day-to-day financial management

### SBU Structure = Corporate Level Decision

When a company restructures itself INTO Strategic Business Units, that is a corporate-level organisational design decision — even though each SBU then makes its own business-level decisions.

### Key Exam Distinction

Pricing strategy → Business Level (not functional). Pricing determines how the company competes in its market.
Distribution partnerships → Business Level (choosing go-to-market channels is competitive positioning).
Marketing campaigns (execution of the pricing/positioning) → Functional Level.

Worked example

### Example 1

Zing Automotive — Distribution partnership as Business Level strategy:

Zing forged partnerships with established dealerships, offering attractive margins, to expand to 80% of national dealerships.

This is a decision about HOW Zing competes in the automotive market → Business Level.
It is NOT corporate level (no portfolio restructuring involved).
It is NOT functional level (this is a strategic market-access decision, not operational execution).
Answer: Business level strategy (b)

### Example 2

Café Delight — Pricing strategy as Business Level:

Café Delight transitioned from pocket-friendly pricing to a skimming strategy to position as a premium restaurant.

Pricing is a core competitive positioning decision — it defines how the company competes.
Skimming vs penetration pricing sits at the Business Level of strategy.
It is NOT functional level (pricing is not merely an operational execution task — it shapes the entire market position).
It is NOT corporate level (it's about competing within the restaurant industry, not about which industries to be in).
Answer: Business level (b)

### Example 3

EcoForge — SBU adoption as Corporate Level decision:

EcoForge adopted a Strategic Business Unit (SBU) model, allowing each product line to adapt quickly to market demands.

Restructuring the entire company into SBUs is an organisational design decision for the whole organisation.
It determines HOW the corporation organises its portfolio of product lines.
This is a Corporate Level decision, not Business Level.
Answer: Corporate Level (a)

⚠️ Common exam mistakes

Confusing Pricing Strategy with Functional Level — pricing is a Business Level competitive decision, not day-to-day functional execution.
Placing SBU structure adoption at Business Level — SBU structure is a Corporate Level decision about organising the whole enterprise.
Thinking distribution partnerships are Functional Level — choosing which channels to use (dealerships, franchises) is Business Level strategy.
Confusing Corporate Level with Top Management Level — Corporate level is about SCOPE (entire organisation), not just seniority of the decision-maker.
Treating all operational matters as Functional Level — some operational decisions (like supply chain strategy) can be business-level if they define competitive positioning.

Reference:

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Levels of Strategy – Corporate, Business, and Functional

Worked example

⚠️ Common exam mistakes