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Functional Strategy

Functional strategy helps business units achieve objectives by maximizing productivity through separate departments each with their own functional strategies. Marketing strategy deals with pricing, selling, and distributing products using market development, product development, and advertising strategies. Financial strategy aims to maximize firm value through lower costs and flexible capital raising to support business strategies. Production strategy determines manufacturing processes and resource use based on factors like product life cycle and volume. Human resource and purchasing strategies involve workforce and supplier management.

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135 views

Functional Strategy

Functional strategy helps business units achieve objectives by maximizing productivity through separate departments each with their own functional strategies. Marketing strategy deals with pricing, selling, and distributing products using market development, product development, and advertising strategies. Financial strategy aims to maximize firm value through lower costs and flexible capital raising to support business strategies. Production strategy determines manufacturing processes and resource use based on factors like product life cycle and volume. Human resource and purchasing strategies involve workforce and supplier management.

Uploaded by

raazoo19
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Functional strategy:

Functional strategy helps to achieve business unit objectives by maximizing productivity.


Just as large organizations, small business also have their separate set of departments,
each with its own functional strategy.

Marketing strategy:
Marketing strategy deals with pricing, selling and distributing a product.
Using a market development strategy: a business unit can;
a. Capture a larger share of an exiting market for current products.
b. Develop a new market for current products.
Using product development strategy, business can;
a. Develop new products for existing markets
b. Develop new products for new markets
Marketing strategy for advertising and promotion;
a. Push strategy: this includes discounts, in-store special offers and
advertising allowances designed to push products through the
distribution system.
b. Pull strategy: advertising pulls the products through the distribution
channels. In this strategy business unit creates brand awareness so that
customers ask about the products.
Marketing strategy for pricing;
a. Skim pricing: high price with high quality and competitors are few.
b. Penetration pricing: this strategy gain market share with a low price.
Depending on business unit objectives either of these choices may be desirable.
However penetration pricing is more likely than skim pricing to raise businesss
profit in long term.

Financial strategy:
Financial strategy attempts to maximize the financial value of the firm. It can
also provide competitive advantage through a lower cost of funds and a flexible
ability to raise capital to support a business strategy.

Production strategy:
It determines how and where a product or service is to be manufactured,
production process, and use of physical resources. The manufacturing strategy is
often affected by products life cycle. As the sales of a product increase, there will
be an increase in production volume.
1. Job shop : one of a kind production using skilled labor
2. Connected line batch flow: where components are standardized.

3. Flexible manufacturing system: parts are grouped into manufacturing


families to produce a wide variety of mass productions items.
4. Continuous improvement: this is system is developed by Japanese firms.
This system continously improve production processes.
5. Mass cutamiztion: it requires that people, process, units, and technology
reconfigure themselves to give customers exactly what they want, when
they want it.

Human resources management strategy


Human resources management is related with handling of employees with in the
business.
1. Self managing work teams: work team with skilled employees who get
relatively high pay
2. Temporary employees: part time employees.
3. Diverse work force: diversity in terms of age and national origin.
Purchasing strategy
Purchasing strategy deals with obtaining the raw materials, parts, and supplies
needed to perform the operations functions.
Multiple sourcing: purchasing materials from several suppliers
Sole sourcing: sole sourcing relies on only one supplier
Parallel sourcing: two suppliers supply the materials.

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