A well-formed functional strategy is one of the most important structural elements of the company itself and a guarantor of high efficiency. In order to properly plan activities and identify priority areas, it is necessary to precisely divide the powers, duties and goals for each department and the employees themselves.
general characteristics
A functional strategy is a providing element in the overall strategic set that determines the direction of a separate functional subsystem of company management, which ensures achievement of goals and fulfillment of assigned tasks. It turns out that top-level strategies (competitive and corporate) give tasks, and functional ones show how one or another solution can be implemented.
The functional strategies of the enterprise are formed by the relevant authorities of individual subsystems. Everyone sees the solution to problems and the achievement of goals in their own way, so imbalance and contradictions often arise. And managers must create a harmonious and mutually supportive structure of functional strategies. To do this, you must:
- participation of all managers in the creation of a general strategy;
- coordination of all points and coordination is mandatory.
In order to formulate optimal strategies, it is necessary to take into account all the guidelines and influencing circumstances.
Development factors
The development of a functional strategy is a rather complex and multi-stage process, which is obliged to focus on a list of the following elements:
- The effectiveness of previously adopted strategies.
- Assessing the state of the internal and external environments of the enterprise, determining the level of influence on the company. Search and implementation of potential opportunities, avoidance or solution of threats.
- Formation of principles and recommendations for development.
- Goals and key performance indicators for the long term.
- The main activities and their resource support (financial, material and human).
- The decision of organizational and managerial issues.
- The expected result of the implemented functional strategies of the company.
The procedure itself is based on:
- consistency - a single accounting period;
- balance;
- profitability - the benefits should outweigh (or in extreme cases equal) the costs that are incurred in performing functional tasks;
- evolutionary development;
- high professional level of staff;
- innovation and investment improvement;
- coordination.
In addition, strategies are based on the general principles of complexity, systemicity, reachability, specificity and flexibility. Also, developers should pay attention to the prospects and novelty of functional strategies: the use of new techniques, technologies and scientific research in practice.
Marketing
Functional marketing strategy is one of the leading development strategies of the company, which is explained by the provision of information, strategic and operational communications of the enterprise with contact audiences.
A marketing strategy defines features related to:
- sales of goods and services;
- pricing policy;
- relations with customers, suppliers and intermediaries;
- behavior with competitors;
- advertising and promoting the company's products on the market.
The formation of a marketing strategy consists of four phases:
- Analysis of the relationship "product - consumer", creating a portrait of a typical client of the company.
- Market segmentation.
- Marketing mix.
- Implementation and monitoring of implementation.
At the heart of this type of strategy are two elements: the market and the product. Or rather: the process of turning a product into a product and its most profitable sale to the consumer.
The main tasks:
- the nature of the impact of selected product and product strategies on sales;
- Estimation of the product life cycle and opportunities for entering the world market;
- price elasticity of demand for services, accounting for advertising costs;
- market research.
It turns out that the marketing strategy is an element of a holistic system that is associated with both input and output data. It is based on needs, innovations, production itself and the market, where the main emphasis is on scientific discoveries and advanced technologies.
Innovative
The strategy of research and development work involves the creation and application of innovations of a different nature, which guarantees the company long-term development. It is formed on the basis of scientific and technical forecasts and probable technological progress.
The described strategy is necessary to increase and maintain the competitive status of products or services provided by the company. It is worth noting:
- reducing the cost of the product through the use of more advanced material and technical resources;
- ensuring the growth of production and sales;
- creating the necessary conditions for entering new segments.
There are several types:
- offensive - a thorough market research on the profitability of the release of high-tech goods;
- defensive;
- intermediate - search and use of the weaknesses of competitors, due to which empty niches in the market are filled;
- absorbing - the creation of their own and the purchase of other people's ideas, patents;
- simulation - copying competitive products with a share of their own changes;
- robber.
When developing an R&D strategy, attention must be paid to the level of risk and the time factor.
Production
A functional production strategy is an element of a strategic set related to the development and implementation of the main activities of an enterprise in the field of product production. When creating, the following parameters are taken into account:
- necessary volumes of production;
- scope and flexibility of production potential;
- level of capital investment;
- time frame.
The production strategy consists of three elements:
- Planning and control.
- Productivity increase.
- Features of the human factor.
It is also worth noting the fact that the production strategy of the company is the most stable in comparison with others.
Financial strategy
Financial strategy - an internal regulatory document, which describes in detail the goals, objectives, priority areas of the company and the necessary financial resources that are necessary to achieve them.
The financial mission is divided into several subgoals:
- profit;
- equity and its profitability;
- asset structure;
- possible risks.
Therefore, forecasts and control are carried out on the basis of a number of indicators:
- profitability;
- financial leverage;
- solvency;
- liquidity.
The significance of this strategy is determined by balancing all tasks and limiting the scope of the company.
Investment
An investment strategy is a system of long-term goals of a firm’s investment activity that defines common goals and ideology itself. Details on:
- goal setting;
- optimization of the structure of formed resources and their rational allocation;
- formation of investment policy;
- maintaining communication with the external investment environment from two sides (as an investor and user).
It is correctly planned investment activity that is the basic premise of strategic changes in the overall organizational structure of an enterprise and its business culture.
Personnel Management
Functional strategies of personnel management are guided by ensuring the normal course of the process of reproduction of labor, the formation and maintenance of a favorable atmosphere within the team.
The main components:
- The basic social element is the improvement of the organizational structure and labor protection bodies, minimizing the influence of harmful factors on the health of employees.
- Functional strategy for the development of human resources.
- Targeted social programs.
In general, functional strategies are formed into a whole interconnected system, which in unity helps the company to become a leader in the market, as well as to maintain a favorable place in the long term.