Functional Level Strategy Definition

Functional Level Strategy Definitions

Functional Level Strategy

Several functions are carried out to run a business effectively. The strategies that aim at bringing effectiveness to different functions of a business are called functional or operational strategies. They are concerned with how the parts of an organization deliver effectively the corporate and business level strategies in terms of resources, processes, and people. They deal with the question of how we support the business-level strategy. At the functional level, resources, work processes, information, and manpower are integrated to bring effectiveness in the business and corporate level strategies. Generally, functional-level strategies are prepared for a year or even less than this. These strategies are related to capability, efficiency, customer services, product quality, and marketing. Production strategy, marketing strategy, human resource strategy, finance strategy, and research and development strategy are the functional strategies of an organization.

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In this way, functional strategies are the actions and decisions of a business to add effectiveness to different functional units. They support the business level and ultimately corporate level strategies.

Types of Functional Level Strategy

The different types of functional strategies are discussed below.

Marketing strategy:

It deals with customers and competitors. Hence, it is related to market position, marketing mix, reputation, and brand.

Production/Operations strategy:

Production/Operations strategy determines how and where a product or service is to be manufactured. It also deals with the level of vertical integration in the production process, deployment of physical resources, relationships with suppliers, and the optimum level of technology.

Finance strategy:

It includes the activities related to the acquisition and management of funds required for the business. It mainly aims at enhancing the financial value of the business.

Human resource strategy:

It deals with the acquisition, development, and maintenance of human resources. It also addresses the skill, motivation, and diversification of human resources.

Research and development strategy:

Research and development has become an integral part of modern businesses. They are vital for the innovation and development of products and processes. Research and development strategy mainly deals with the acquisition, use, and development of technology.

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