Functional Strategy

By Dr. Smita Singh

Institute of Management Sciences,
University of Lucknow
  Functional strategy is the approach a functional area takes to
achieve corporate and business unit objectives and strategies by
maximizing resource productivity.

Functional  It is concerned with developing and nurturing a distinctive

competence to provide a company or business unit with a
Strategy competitive advantage.
 Just as a multidivisional corporation has several business units,
each with its own business strategy, each business unit has its own
set of departments, each with its own functional strategy.
  Marketing Strategy
 Financial Strategy
 Research and Development Strategy
Functional  Operations Strategy

Areas  Purchasing Strategy

 Logistics Strategy
 Human Resource Strategy
 Information Technology Strategy
  Marketing strategy deals
with pricing, selling, and
distributing a product.

 Market development
strategy,
Marketing  Product development
Strategy strategy

 Promotion Strategy

 Distribution Strategy

 Pricing Strategy
  Financial strategy examines the
financial implications of corporate
and business-level strategic options
and identifies the best financial
course of action.

Financial  Financial decisions relate to

Strategy  Trade-off between achieving the
desired debt-to-equity ratio
 Influence of strategy on financing
decision
 Management of dividends and stock
price
 Novel Financial strategies
  R&D strategy deals with product and process
Research and innovation and improvement.
Development  Technological Leader
Strategy  Technological Follower
 Open Innovation

• Operations strategy determines how and where a product or

service is to be manufactured, the level of vertical integration
Operations in the production process, the deployment of physical
resources, and relationships with suppliers.
Strategy  Advanced Manufacturing Technology (AMT)
 Modular Manufacturing
 Mass Customization
  Purchasing strategy deals with obtaining the raw
materials, parts, and supplies needed to perform
Purchasing the operations function.
Strategy  Multiple Sourcing
 Sole Sourcing
 Parallel Sourcing

• Logistics strategy deals with the

Logistics flow of products into and out of the
Strategy manufacturing process. Three
trends related to this strategy are:
• Centralization,
• Outsourcing, and
• Use of the Internet.
  HRM strategy, among other things, addresses the
issue of hiring, training, induction, manpower
Human retention, compensation and appraisal.
Resource  Self-Managed Work Teams
 360-degree Appraisal
Strategy  Diverse Workforce

• Corporations are increasingly

using information technology
Information strategy to provide business units
with competitive advantage.
Technology  Follow-the-Sun strategy
Strategy  Intranet and Extranet
  Distribution
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 Promotion
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 Push vs Pull
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 Finance https://www.tomorrowmakers.com/sites/default/files/2019-07/shutterstock_538414810.jpg
 Research Books https://ehilab.cdm.depaul.edu/wp-content/uploads/2020/01/research-tech-books-feat-1.jpg
 Operations Management https://www.channelfutures.com/files/2018/05/Operations-Management-2018.jpg

Image Credits  Operations

 Logistics01
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https://www.justsaynodeal.com/wp-content/uploads/2019/09/Pharmaceutical-Logistics-1.png
 Information Technology https://meity.gov.in/writereaddata/files/Picture_intro.jpg
 Human Resource https://berserkon.com/img/get
 Advertising-Production-Services
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 Strategy
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 Finance https://www.crystalconsultinggroup.com/finance-accounts.htm
 Logistics02
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