The strategic hierarchy relates to large firms only. They own multiple businesses and will structure their strategic decisions accordingly. Below is a list of examples of strategic hierarchy decisions. This is important to understand as different types of marketing and strategic decisions are made at different levels in the organization. In other words: strategy means different things at different parts of a firm’s hierarchy.
Examples of strategic hierarchy decisions
At the Corporate level of the Strategic Hierarchy
- Overall mission and values
- What businesses (SBUs) should we be in?
- Acquisitions, mergers, divestments
- What SBUs should we invest in?
- What SBUs should we milk (maximize profits)?
- Overall financial structure and capital raising
- Goals for the entire corporation
- Set targets for individual SBUs
At the Strategic Business Unit (SBU) level of the Strategic Hierarchy
- How to compete decisions
- What product categories to offer?
- Market expansion decisions
- Structure and management system (HR)
- Main technology (IT and/or manufacturing)
- Meet targets of the corporate level
- Develop the SBU strategic plan
At the Function level of the Strategic Hierarchy
- Marketing mix decisions
- Promotional campaigns
- Individual product decisions
- Implementation of tactics
- Meet strategic plan targets
- Develop the marketing (or other function) plan
It’s a strategy hierarchy
The word hierarchy means that the decisions made at the top level of the organization and more significant and will generally flow downwards. This means that at the functional level of the strategic hierarchy strategic decisions are made that are designed to implement SBU goals and strategy. Likewise at the SBU level of the strategic hierarchy, decisions are made to help implement the overall corporate strategy.
Strategic decisions made at a lower level in a strategic hierarchy will support higher level goals and strategy.