Strategic Management Levels

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Due to different perspectives, several levels can be differentiated within the framework of strategic management , which are particularly important in the phase of strategic analysis and planning. A total of four levels must be observed here. Especially when looking at a company internally, the company and business area levels must be separated from each other. In contrast, when examining the corporate environment, the industry and its superordinate macro level play an important role. Due to the breadth of the market processed by the company , all levels can also be global, national or regional.

In the following, the four levels of aggregation are presented with regard to their use and their importance in the course of strategic management using the example of a globally operating automobile manufacturer.

Company level

The company level represents the most detailed observation horizon in the course of strategic management. The decisions made here are based on a large number of individual pieces of information, which can be condensed through a suitable company analysis. The company analysis provides the framework for a suitable environmental analysis, and the results of this in turn flow into the future strategy at company level. The current positioning of a company within a market can be determined using key figures (KPIs). Widely used instruments of company analysis are:

Based on the results of the company analysis, a suitable allocation of the available resources is made at the business area level. In addition, the knowledge gained can lead to adjustments to the processes, structures and systems within the company.

In the example given, the car manufacturer itself is the starting level. The internal circumstances are analyzed in order to find a suitable strategy. Because the company operates globally, this is a global endeavor spatially.

Business area level

In addition to the purely internal consideration, the market that is being worked on must also be examined in strategic management. From the company's point of view, this is initially done at the business area level, i.e. with regard to its own positioning on the market. The aim is to find the optimal strategy for the various fields of activity of a company. The focus here is on generating competitive advantages .

A business field represents the segment of a market in which a company operates. Responsible for this are usually strategic business units , i.e. largely autonomous business sub-areas that are based on a certain market-product combination. The resulting market segment unites customers with homogeneous needs with the corresponding product or service. The definition of strategic business areas and units is an essential part of the corporate strategy.

Taken together, an overall market can be derived from the market segments of a provider, which connects all sub-markets below. For the automobile manufacturer, for example. B. the small car market is a segment of the relevant overall market, the world market for cars. In the small car segment as a strategic business area, the company can operate simultaneously with several brands as strategic business units.

Industry level

The industry can be defined as the third level of aggregation. Companies can only exert an indirect influence here, so that the focus is predominantly on the corporate environment. This consideration was mainly shaped by Porter's industry structure analysis , in which five forces are represented (the so-called "five forces"), which can threaten the success of one's own company within the industry. In addition to the actual competitors, new providers, suppliers and customers within the branch also have an effect in this sense. In addition, substitute products can jeopardize the positioning of a company. In contrast to the business area level, the entire added value for the industry can be summarized at this level.

The companies within an industry can be structured on the basis of strategic groups , whereby they are grouped according to their strategic proximity. This is expressed through a similarity in strategic aspects such as the degree of specialization, the cost structure, the quality level or the degree of vertical integration . This distance between the companies can be displayed on a strategic map, in which the companies in the group are compared in a two-dimensional coordinate system based on two strategic dimensions that are central to the industry.

Between the individual strategic groups prevent market barriers (including mobility or barriers to market entry called) a change. These barriers are built up by the companies belonging to a group in order to defend their own market position. The barriers can be structural, behavioral or strategic in nature.

In our example, the automotive industry also includes related branches of industry, such as the supplier industry, and not just the actual car market.

Macro level

The global corporate environment serves as the highest level of observation in the context of strategic management. This macro-environment is defined by Welge, Al-Laham, Eulerich as “the set of conditions in a geographical area that apply to a large number of companies and that influence the company's scope of action both directly and indirectly”. Such influences can be, for example, the economic situation, the exchange rate ratio or trade barriers .

Due to their superimposed character, there is little possibility of controlling or influencing the macro-environment. Nevertheless, it can be segmented using models in order to be able to perceive changes and make adjustments. The STEP analysis , which distinguishes between socio-cultural, technological, economic and political influencing factors, is particularly widespread . In extensions of the model, ecological (“STEEP”) and legal aspects are also delimited (“PESTLE”).

Current developments such as digitization and the increasing entanglement of international law lead to increasing dynamics and complexity in the global corporate environment . Therefore, in order to prepare strategic decisions, a continuous and systematic analysis of all relevant factors is required in order to separate important from unimportant.

In the case of the automobile manufacturer mentioned, the entire world economy is considered at the macro level, as well as all other facets that have some form of influence on one's own position. For example, stricter environmental requirements for vehicle registration could have a negative impact. On the other hand, however, z. B. a technological invention in science can lead to massive savings in production.

literature

  • Harald Hungenberg: Strategic Management in Companies. Goals - Processes - Procedures. 8th edition. Springer Gabler, Wiesbaden 2014, ISBN 978-3658066802 .
  • Martin K. Welge, Andreas Al-Laham and Marc Eulerich: Strategic Management. Basics - Process - Implementation. 7th edition. Springer Gabler, Wiesbaden 2017, ISBN 978-3658106478 .
  • Bernd Sauer: Strategic situation analysis in environmental management. Deutscher Universitäts-Verlag GmbH, Wiesbaden 1993, ISBN 3824401673 .
  • Martin Kaschny, Matthias Nolden and Siegfried Schreuder: Innovation management in medium-sized companies. Strategies, implementation, practical examples. Springer Gabler, Wiesbaden 2015, ISBN 978-3658025441 .

Individual evidence

  1. ↑ Bernd Sauer: Strategic situation analysis in environmental management. Deutscher Universitäts-Verlag GmbH, Wiesbaden 1993, ISBN 3824401673 , p. 111 ff
  2. ↑ Harald Hungenberg: Strategic Management in Companies. Goals - Processes - Procedures. 8th edition. Springer Gabler, Wiesbaden 2014, ISBN 978-3658066802 , p. 247
  3. ^ Martin K. Welge, Andreas Al-Laham and Marc Eulerich: Strategic Management. Basics - Process - Implementation. 7th edition. Springer Gabler, Wiesbaden 2017, ISBN 978-3658106478 , p. 302