It is known that functional strategy involves strategic development of new products, marketing strategies, financial and legal strategies, information technologies and strategy of human resources. This strategy concentrates only on short-term and medium-term planning. It is restricted by functional responsibility of each organizational department. Many think that this strategy isn’t efficient and it is not able to organize the process of strategic management.
Strategic business unit is “semi-autonomous unit within an organization”. (Strategic management techniques) Such strategy is absolutely responsible for its budget, price settings and decision making. Each unit is known to be responsible for strategic development. (Canals 2000) Operational strategy is the lowest level. It concentrates on everyday operational activity and different schedules. This strategy operates within the budget, but has no possibilities to create and to influence it.
Business strategy is the strategy of competitiveness in the firm’s chosen areas. It refers to gathered operational strategy. It is a well-known fact that corporate strategy involves overarching strategy and answers the following questions: “In which business should we compete? ” and “how does being in one business add to the competitive advantage of another portfolio firm, as well as the competitive advantage of the corporation as a whole? ” (Strategic management techniques)
Strategic management process involves evaluating of the external and internal factors which greatly influence the work of strategic management and have strong impact on strategic leadership. It is necessary to say that each firm faces such influential factors. So it is necessary to follow the influence of these factors on the examples of Glaxo. External factors include: Natural and climatic conditions Ecology Political and economic conditions in the country
Social and psychological conditions (Strategic management techniques) External factors are also subdivided into factors of direct influence and indirect influence. Direct external factors include laws and public regulations, partners and suppliers, labor resources, customers and competitors. Indirect external factors involve economic conditions, the level of scientific and technical advance, political changes, social and cultural changes, the influence of group interests, important event, etc. (Strategic management techniques)