Table of Contents

Introduction:....................................................................................................................................3

Corporate Level Strategy.................................................................................................................4

Business Level of Strategy:.............................................................................................................5

Competitive strategy:.......................................................................................................................5

Cost Leadership:..........................................................................................................................6

Differentiation Leadership:..........................................................................................................6

Cost focus:...................................................................................................................................6

Differentiation focus....................................................................................................................7

Functional Strategy Level............................................................................................................7

Different Types of Analytical Tools:...............................................................................................8

SWOT Analysis:..........................................................................................................................8

PESTLE Analysis for External Environment:...........................................................................10

Importance of Employee Empowerment:......................................................................................11

Importance of Training:.................................................................................................................12

Impact of introducing various forms of new technology on the business structure:.....................12

Total quality management (TQM):................................................................................................13

Lean Management:........................................................................................................................14

Creative Strategic Approach of Amazon in the Management Function:.......................................15

Conclusion:....................................................................................................................................17

References:....................................................................................................................................18

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Introduction:

This paper is going to cover four different parts. The first part of the paper will discuss three
level of business strategy, corporate, business and functional level of strategy. In the next part of
this paper will cover two tools, one is SWOT analysis and anther is PESTLE tool to analyze
internal and external environment factors of an organization. In the next part, different types of
management practices such as empowering staff, training staff, introducing schemes for
improving quality, and introducing various forms of new technology on the business structure

will be discussed. And in the very last section of this paper, the creative approach taken by

Amazon in the management function will be discussed.

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Different Types of Strategic Concepts:

To be a successful manager, one needs to understand different types of business concepts

properly. S/he also needs to understand how those concepts are important to make managerial
decision. Here various types of strategic concepts will be discussed.
We know that there are three levels of strategy. They are as follows:
1. Business Level of Strategy
2. Corporate Level of Strategy
3. Functional Level of Strategy

Figure: Level of strategy (Source: cascade.app)

Corporate Level Strategy

This types of strategies also known as the ‘top’ level of strategy in an organization. The
corporate strategy tells the overall direction the organization will move in and the high-level
plans of how. The CEO and top management are usually responsible for making the top level

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strategy. Generally this is the group involved because they hold a deep understanding of the
company and strategic business knowledge needed to steer the organization in the right direction.
These strategies are generally broader in nature compared to the other strategy levels (Allen,
Helms, 2006.). These strategies include more conceptual and futuristic than business/functional
area strategies, and will usually span a 3-5 year period.

Some area of Corporate Level Strategy:

 An overall vision for the organization

 Corporate values
 Focus areas
 Strategic objectives
 KPIs

Business Level of Strategy:

Business level strategy is the second tire of the strategy level which determines how the
business’s resources will be spent. For large companies, there are many business units and each
business unit will have its own business level strategy based on services, products, divisions or
multiple related departments. The main objective of this strategy is to differentiate the business
from the competition and create specific objectives and initiatives. For this reason the completive
strategy is a main issue in this case.

Competitive strategy:

Competitive strategy is a long-term action plan taken by a company which aims to gain
competitive advantage over its rivals after evaluating their strengths, weaknesses, opportunities
and threats in the industry and compare it with your own. According to Michael Porter, there are
four types of competitive strategies. They are:

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Cost Leadership:
Here, the main objective of the firm is to become the lowest cost producer in the industry. This is
achieved by producing in large scale which enables the firm to attain economies of scale. There
are some crucial factors in this case, for example: high capacity utilization, good bargaining
power, high technology implementation.

Figure: Porter’s Competitive Strategy (Source:tutor2u.com)

Differentiation Leadership:
Under this strategy, the main aim is to maintain unique features of its products in the market thus
creating a differentiating factor. Achieving market leadership is the main focus of this strategy
by producing unique features. It enables a firm to charge a premium price for the products (due
to high value added features). The main characteristics of these types of product are: superior
brand and quality, major distribution channels, consistent promotional support etc. E.g. BMW,
Apple.

Cost focus:

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Under this strategy, firm keeps its focus on a specific market segments and charge the lowest
price of products segments. Such strategy helps firm to satisfy sufficient consumers and gain
popularity. E.g. Sonata watches

Differentiation focus
Under this strategy, firm targets to differentiate itself from one or two competitors, again in
specific segments only. This type of differentiation is made to meet demands of border
customers who refrain from purchasing competitors’ products only due to missing of small
features. It is an example of niche marketing strategy. E.g. Titan watches.

Functional Strategy Level

This is the level at which the lower level manager make decisions in an organization. These
strategies are also described as tactical decisions (Clary, Snyder, Ridge, 1992). They are focused
on how the various functions of an organization contribute to the other strategy levels.

Figure: Functional Level Strategy

These functions are: marketing, finance, manufacturing, human resources and more. Functional
strategy deals with a fairly restrictive plan, giving the objectives for each specific function.

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Different Types of Analytical Tools:

For making a good decision, a manager needs to use different types of analytical tools. It helps to
take more efficient decision. In this case AMAZON is taken as an example in this section. Some
major tools are discussed here.

SWOT Analysis:
There are four factors of SWOT analysis. By analyzing those factors, a manager can take more
effective decisions. It is one of the best analytical tools for analyzing internal factors all over the
word.

Figure: SWOT Analysis (Source: umenlearning.com)

Here we can see that by analyzing a company’s strengths and weaknesses, a manager can judge
its internal environment. Because this two factors are related to internal environment (Gürel, Tat,
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2017). On the other hand, opportunities and threats are those factors which are from external
environment.

Let’s have a look how SWOT helps a manager to take decision:

There are some factors which can be the strengths as well as the weakness for an organization.
They are as follows:

 Financial resources
 Technical resources and capabilities
 Human resources
 Product lines
 Organizational Culture
 Key Staff
 Operational efficiency
 Operational Capability
 Patterns and Trade

The above factors can affect in an organization’s internal environment. By the help of SWOT
analysis, a manager can understand these factors properly.

Here it can be said that:

1. SWOT analysis identifies the shortcomings in the company’s present skills and resources by
which a manager can understand which strategy needs to be taken in future.

(b) It gives a proper understanding on internal factors which help to exploit the strengths of the
company to achieve its objectives.

(c) By maximizing the internal strengths a manager can focus on profit-making opportunities in
the business environment and for identifying threats.

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(d) It enables to highlight areas within the company, which are strong and which might be
exploited more fully and weaknesses, where some defensive planning might be required to
prevent the company from downfall.

PESTLE Analysis for External Environment:

PESTLE analysis is a strategic management tool that businesses use to identify macro-economic
factors that it needs to consider. The word ‘PESTLE’ stands for the six factors – Political,
Economic, Social, Technological, Legal, and Environmental. Together, the tool is used for
identifying key issues that may impact the strategic direction of the company.

Figure: PESTLE Analysis (Source: boycewire.com)

By the helps of PESTLE analysis, a manager can find out the factors which are influencing on
the environment of an organization (Perera, 2017). The best thing about the PESTEL analysis is
that it makes easy to understand the factors that affect the business environment. When it comes
to the development of a new product, it increases strategic thinking and deeper understanding of

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various factors like consumer laws, new technological trends, etc., which affect the product
launch in the market.

By the tools, a manager can know what are the key external factors that going to face in the
upcoming days. By identifying those factors, an organization can take proper proactive strategies
to avoid any unpleasant situation in future.

So it can be said that, both SWOT and PESTLE analysis are very much crucial to understand the
macro and micro environment of an organization. It helps to take effective strategy which is
important for the external threats and to grab the opportunity.

Importance of Employee Empowerment:

Empowerment means giving people authority to make decisions based on what they feel is right,
have control over their work, take risks and learn from mistakes, and promote change (Evans and
Lindsay, 2008). Empowerment is important for various reasons. Some of those are as follows:

Improved morale: When employee empowerment is done by the organization, the employees
feel them important for the organization which improves their morale.

Increased productivity: Quality management practices also translate into increased productivity
as they become more committed to the organization.

Team cohesion: Employee empowerment fosters better relationships between employees and the
top management. It brings better working environment in an organization.

Innovation: Employee empowerment cultivates innovation as employees that have a stake in

company growth and sustainability will offer more ideas and problem solving solutions when
solutions arise.

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Importance of Training:

Training is important because it enables a good opportunity for employees to grow their
knowledge base and improve their job skills to become more effective in the workplace. Some
major impacts of training are as follows:

1. Improves knowledge and skills: Training is done to improve the current knowledge of
employees and to add some new skills which will essential for doing the tasks by the employees.

2. Improves Performance: training helps to reduce skills gap and knowledge. This may
improve the performance of employees. Again, continuous improvement of employees is a goal
for the organization as well as the employees (Rodriguez, Walters, 2017).

3. Reduces employee turnover: lack of taking proper steps for the development of the
employees is responsible for employee turnover. By introducing training, the turnover rate may
decrease.

4. Increases engagement: Engaged employees have an increased level of productivity - it’s as

simple as that! Through training, you're continuously engaging your employees and enabling
them to engage back.

Impact of introducing various forms of new technology on the business

structure:

It is essential to introduce up-to-date technology in an organizaion. There are some reasons of

this. They are as follows:

1. Skilled Workforce: New technology can improve the skills of employees. For operating new

technology, the employees need to learn new skills. Sometimes they learn it willingly;

sometimes organizations arrange training for them which enable more skilled employees in the

organization (Azar, Ciabuschi, 2017).

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2. Improving Productivity: New technology can improve productivity of employees. As we

know that, old technology becomes obsolete after a certain period of time. New technology then

can help the employee to produce more with the same level of input.

3. More quality product: New technology can be a weapon for producing more quality

products. New technology is essential for total quality management. It also helps o continuous

improvement.

4. Achieving economies of scale: if a company wants to ensure low producing cost, then it is

essential to achieve economies of scale. By the help of new technology, a company can ensure it.

It reduces wastage which is also a objectives for any organization.

Total quality management (TQM):

Total quality management (TQM) is the continual process to detect and reduce or eliminate
errors in manufacturing, streamlining supply chain management, improving the customer
experience and ensuring that employees are up to speed with training (Boudrias, Gaudreau,
Savoie, Morin, 2009). The objective of total quality management is to hold all parties involved in
the production process accountable for the overall quality of the final product or service.

William Deming, the father of TQM, was a management consultant whose work had a great
impact on Japanese manufacturing. The major principles of TQM are:

Employee Continuous Customer Focused Process Oriented

Empowerment Improvement
1. Training 1. Systematic 1. Partnership with 1. Thinking about the
measurement Suppliers process
2. Excellence team
2. Excellence teams 2.Service relationship 2. Handling of the
3.Measurement and
with internal process
recognition 3.Cross-functional
customers
process management 3.Processes which are
4. Suggestion scheme
3. Customer-driven
4. Attain, maintain,

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 improve standards standards result oriented

4. Never compromise
quality

Table: Principles of TQM

Lean Management:

Lean management is an approach to manage an organization which supports the concept of

continuous improvement, a long-term approach to work that systematically seeks to achieve
small, incremental changes in processes in order to improve efficiency and quality (Kadarova,
Demecko, 2016.). It helps to optimize processes by reducing less important activities
(unnecessary operations or transport, waiting, overproduction etc.), poor-quality costs and
complications. This method depends on a management strategy that allows employees to work in
the best possible conditions. Basically the approach has two main objectives: 1.complete
customer satisfaction and 2.employee success.

Figure: Principles of Lean Management (Source: theleanway.net)

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So, here it is seen that, all management practice such as empowering staff, training staff,
introducing schemes for improving quality, and introducing various forms of new technology

on the business structure are taken by the organization for ensuring total quality management,

continuous improvement of employees, ensuring lean management and Kaizen etc.

Creative Strategic Approach of Amazon in the Management Function:

Creative strategy is the intentional and strategic approach a company takes in developing and
implementing steps that will ensure and support the business’ growth. Actually, it is the outline
or blueprint of how the end goals will ultimately be met. Amazon, a business giant, follows this
strategy in their management function (Bilton, Cummings, 2010). They have established such an
organizational structure which improves the creativity of the employees. They give proper
opportunity to think out of the box which is very much important to be creative. Let’s check out
their strategy:

1. Planning: Planning is the most important area of management function. Proper planning can
bring success easily. Amazon is the perfect example of this. They follow creative approaches to
solve problem. Their specialty in differentiation strategy has made them the market leader in
online shopping. We can talk about their kindle project. It was the outcome of creative strategy.
They proactively thought about the future which gives them competitive advantages over the
competitor.

2. Human Resource Management: Another area of their creative strategic approaches is in

human resource management. They select the best employees throughout the world. They give
proper scope to learn and develop their skills. Their incentive scheme is a factor in this case.
They try to find out the best employees who have potentiality.

3. Supply Chain Management: Amazon shows it creativity in their supply chain. They follow a
unique supply chain system. A big part of Amazon’s success lies in its expert warehousing
strategy, which ensures products are easily accessible from pretty much everywhere in the world.
Again, one of the biggest differentiators between the Amazon supply chain strategy and other
online retailers’ is the plethora of delivery options offered (Chiles, Dau, 2005). The Amazon

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supply chain management approach uses different types of technology. The company utilizes a
lot of automation and robotic solutions, both to pick and pack orders as well as stacking and
storing inventory.

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Conclusion:
At the end, it can be concluded that, there are different levels of strategies and planning and
implementing of those strategies are different a manager use SWOT and PESTLE analysis for
better understanding of the external and internal environment. Different types of management
practices such as empowering staff, training staff, introducing schemes for improving quality,
and introducing various forms of new technology on the business structure are taken for the

betterment of the organization. And finally, creative strategic approach can make an

organization better performer and can give competitive advantages in the industry.

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References:

Allen, R.S. and Helms, M.M., 2006. Linking strategic practices and organizational performance
to Porter's generic strategies. Business Process Management Journal.

Azar, G. and Ciabuschi, F., 2017. Organizational innovation, technological innovation, and
export performance: The effects of innovation radicalness and extensiveness. International
Business Review, 26(2), pp.324-336.

Bilton, C. and Cummings, S., 2010. Creative strategy: reconnecting business and innovation
(Vol. 3). John Wiley & Sons.

Boudrias, J.S., Gaudreau, P., Savoie, A. and Morin, A.J., 2009. Employee empowerment.
Leadership & Organization Development Journal.

Clary, E.G., Snyder, M. and Ridge, R., 1992. Volunteers' motivations: A functional strategy for
the recruitment, placement, and retention of volunteers. Nonprofit Management and leadership,
2(4), pp.333-350.

Chiles, C.R. and Dau, M.T., 2005. An analysis of current supply chain best practices in the retail
industry with case studies of Wal-Mart and Amazon. com (Doctoral dissertation, Massachusetts
Institute of Technology).

Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).

Kadarova, J. and Demecko, M., 2016. New approaches in lean management. Procedia
Economics and Finance, 39, pp.11-16.

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Perera, R., 2017. The PESTLE analysis. Nerdynaut.

Rodriguez, J. and Walters, K., 2017. The importance of training and development in employee
performance and evaluation. World Wide Journal of Multidisciplinary Research and
Development, 3(10), pp.206-212.

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