Business-level strategy vs functional-level strategy

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What is a business-level strategy?

 A business-level strategy refers to the strategy for how the firm will compete in a particular business segment. It is the strategy that holds together the business segment together, indicating how to compete. 

What is a functional-level strategy?​

Functional-level strategies are strategies for how specific functional areas of the firm will operate. Some examples of functional-level strategies include:

  • R&D strategy
  • Manufacturing strategy
  • Operations strategy
  • Marketing strategy

The importance of alignment between business-level and functional level strategies

While business-level strategies and functional-level strategies are different levels of the firm’s strategy, it is important that they are each aligned with one another. The functional strategies are how the business-level strategy is enacted, and thus it is important that the functional strategies are all consistent with one another and the broader business-level strategy that the firm is pursuing.