A functional strategy refers to how a functional division of a company will achieve its objectives. The execution of a functional strategy supports the competitive strategy of a business unit by maximizing resource productivity. It focuses on developing competition in search of a competitive advantage. Key functional areas include marketing, accounting, finance, operations, research and development, and human resources. The functional strategy will revolve around key people in the functional area and will focus on key operational aspects of the value chain, such as productivity, pricing, logistics, profitability, efficiency, product design, product brand and image, product life cycle, etc.
While often included within a functional strategy, an operational strategy refers to the way in which the components (operating divisions) of an organization effectively apply strategies at the corporate level, business and functional in terms of resources, processes and people. They are at the departmental level and set periodic short-term objectives for their fulfillment. There are different types of business-level strategies that organizations adopt, depending on the competitive advantage they want to obtain. In this blog, we'll delve into the world of strategic management and explore the three main types of organizational strategies that every manager should know.
To begin, let's take a closer look at three of the most popular types of strategies in strategic management. Now that we've explored the types of strategies in strategic management, let's take a look at the basic model of strategic management.