case study on business level strategy

The Leading Source of Insights On Business Model Strategy & Tech Business Models

Business Strategy Examples In 2024: Examples, Case Studies, And Tools

A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. A business strategy, in most cases, doesn’t follow a linear path, and execution will help shape it along the way.

Table of Contents

What is a business strategy?

At this stage, it is important to clarify a few critical aspects.

As an HBR working paper entitled “From Strategy to Business Models and to Tactics” pointed out:

Put succinctly, business model refers to the logic of the firm, the way it operates and how it creates value for its stakeholders. Strategy refers to the choice of business model through which the firm will compete in the marketplace. Tactics refers to the residual choices open to a firm by virtue of the business model that it employs.

Personally, I have a controversial relationship with the concept of “strategy.” I feel it’s too easy to make it foggy and empty of practical meaning.

Yet strategy and vision matter in business.

A strategy isn’t just a calculated path, but often a philosophical choice about how the world works.

Usually, it takes years and, at times, also decades for a strategy to become viable. And once it does become viable, it seems obvious only in hindsight.

In this guide, we see what that means.  

In the real world, the difficult part is understanding the problem

In the real world, a lot of time and resources are spent on defining the problem.

Classic case studies at business school assume in most scenarios that the problem is known and the solution needs to be found.

In the real world, the problem is unknown, the situation is highly ambiguous, and the most difficult part is making the decision that might solve that same problem you’re trying to figure out. 

How do you execute a strategy in that context? Business modeling can help!

Is a business strategy the same thing as a business model?

As the business world started to change dramatically, again, by the early 2000s, also the concept of strategy changed with it. 

In the previous era, the strategy was primarily made of locking in the supply chain to guarantee a strong distribution toward the marketplace. 

And yet, the web enabled new companies to form with a bottom-up approach.

In short, product development cycles shortened, and frameworks like lean , agile , and continuous innovation became integrated into a world where software took over. 

Where most of the processes before the digital age, were physical in nature. As the web took off, most of the processes became digital.

In short, the software would become the core enhancer of hardware. 

We’ve seen how in cases like Apple’s iPhone , it wasn’t just the hardware that made the difference.

But it was the development ecosystem and the applications that enhanced the capabilities of the device. 

Thus, from a product standpoint, hardware has been enhanced more and more with the software side.

At the same time, the way companies developed products in the first place changed. 

Software and digits-based companies could gather feedback early on, thus enabling the customers’ feedback as a key element of the whole product development cycle. 

Therefore, wherein the previous era, companies spent billions of budgets to release markets, and products, with little customer feedback.

In the digital era, customer feedback became built into the product development loop. 

That led to frameworks with faster and faster product releases, which also changed the way we do marketing . 

In a classic MVP approach, the loop (build, measure, learn) has to be very quick, and it has to lead to the so-called product/market fit .

As the web made the ability to gather customers’ feedback early on, and as the whole process becomes less and less expensive, also lean approaches evolved, to gain feedback from customers as early as possible. 

From build > demo > sell, to demo > sell > build , lean approaches got leaner. 

And the era of customer-centrism and customer obsession developed:

This whole change flipped the strategy world upside down.

And from elaborate business plans , we moved to business modeling , as an experimental tool, that enabled entrepreneurs to gather feedback continuously.

In a customer-centered business world, business models have become effective thinking tools, to represent a business and a business strategy on a single page, which helped the whole execution process. 

The key building blocks of a classic business model approach, like a business model canvas or lean startup canvas  move around the concept of value proposition , that glue them together. 

And from the supply chain , we moved to customer value chains .

Where most digital business models  learned to gather customers’ feedback in multiple ways. 

The business strategy formed in the digital era, therefore, developed its own customer-centered view of the world, and the business theory world followed.

Academics, following practitioners, moved away from traditional models (like Porter’s Five Forces ) to more customer-centered approaches ( business model canvas , lean canvas).  

The mindset shift flipped from distribution and optimization on the supply side.

To optimize on the demand side, or how to build products that people want, in the first place. This is the new mantra.

No more grandiose business plans, just substantial testing, iteration, and experimentation. 

In this new context, we can understand the strategy developed by several players and how business modeling has become the most important strategy tool. 

And the interesting part is, whether you want to scale to become a tech giant, or you just want to build a small, viable business, it all starts from the same place!

Is business strategy a science?

Business strategy is more of an art than a science.

In short, a business strategy starts with a series of assumptions about how the business world looks in a certain period of time and for a certain target of people.

Whether those assumptions will turn out to be successful will highly depend on several factors.

For instance, back in the late 1990s when the web took over, new startups came up with the idea of revolutionizing many services.

While those ideas seemed to make sense, they turned out to be completely off, and many of those startups failed in what would be recognized as a dot-com bubble.

While in hindsight certain aspects of that bubble came up (like frauds, or schemes).

In general, some of the ideas for which startups got financed seemed to be visionary and turned out to work a decade later (see DoorDash , or Instacart , in relation to Webvan’s bankruptcy). 

For instance, some startups tried to bring on-demand streaming to the web (which today we call Netflix ). Those ideas proved to be too early.

They made sense but from the commercial standpoint, they didn’t.

Thus, if we were to use the scientific method, once those assumptions would have proved wrong in the real world, we would have discarded them.

However, those assumptions proved to be wrong, in that time period, given the current circumstances.

While we can use the scientific inquiry process in business strategy, it’s hard to say that it is a scientific discipline.

So what’s the use of business strategy?

In my opinion, business strategy is useful for three main reasons:

• Focus : chose one path over another.
• Vision : have a long-term strategic goal.
• Commercial viability : create a self-sustainable business.

As a practitioner, someone who tries to build successful businesses, I don’t need to be “scientific.”

I need to make sure not to be completely off track. For that matter, I aim at creating businesses.

Thus, I need to understand where to focus my attention in a relatively long period of time (3-5 years at least) and make sure that those ideas I pursue are able to generate profits, which – in my opinion – might be a valid indicator that those ideas are correct for the time being.

If those conditions are met, I’ll call it a “successful business.”

Those ideas will become a business model , that executes a business strategy.

This doesn’t mean those ideas, turned into a business model , pushed into the world will always be successful (profitable).

As the marketplace evolves I will need to adjust, and tweak a business model to fit with the new evolving scenarios, and I’ll need to be able to “bet” on new possible business models .

Survivorship bias

Survivorship bias is a phenomenon where what’s not visible (because extinct) isn’t taken into account when analyzing the past.

In short, we analyze the past based on what’s visible.

This error happens in any field, and in business, we might get fooled by that as well.

In short, when we analyze the past we do that in hindsight.

That makes us cherry-pick the things that survived and assume that those carry the successful characteristics we’re looking for.

For instance, for each Amazon or Google that survived there were hundreds if not thousands of companies that failed, with the same kind of “successful features” as Amazon or Google.  

So why do we analyze successful companies in the first place? In my opinion, there are several reasons: 

• Those successful companies have turned into Super Gatekeepers to billions of people : as I showed in the gatekeeping hypothesis , and in the surfer’s model , a go-to-market strategy for startups will need to be able to leverage existing digital pipelines to reach key customers.

• Modeling and experimentation : another key point is about modeling what’s working for other businesses and borrowing parts of those models, to see what works for our business. By borrowing parts you can build your own business model, yet that requires a lot of testing. 

• Skin in the game testing : therefore business models become key tools for experimentation, where we can use real customers’ feedback (not a survey, or opinions but actions) and test our hypotheses and assumptions. When we’re able to sell our products, when people keep getting back to our platform, or service, there is no best way to test our assumptions that measure those actions. 

Lindy effect and aging in reverse

Nicholas Nassim Taleb , in his book Antifragile , popularized a concept called Lindy Effect .

In very simple terms the Lindy Effect states that in technology (like any other field where the object of discussion is  non-perishable)  things age in reverse.

Thus, life expectancy, rather than diminishing with age, has a longer life expectancy.

Therefore, a technology that has lived for two thousand years, has a life expectancy of another thousand years.

That is a probabilistic rule of thumb that works on averages.

Thus, if a technology (say the Internet) has stayed with us for twenty years, it doesn’t mean we can expect only to live for another twenty years at least.

But as the Internet has proved successful already, the Lindy Effect might not apply.

In short, as we have additional information about a phenomenon the Lindy Effect might lose relevance.

For instance, if I know a person is twenty, yet sick of a terminal disease, I can’t expect to use normal life expectancy tables.

So I’ll have to apply that information to understand the future.

Strategies take years to fully roll out

It was 2006, when Tesla, with his co-founder   Martin Eberhard , launched a sports car that broke down the trade-off between high performance and fuel efficiency.

Tesla, which for a few years had been building up an electric sports car ready to be marketed, finally pulled it off.

As Elon Musk would   explain   Back in 2012:  

In 2006 our plan was to build an electric sports car followed by an affordable electric sedan, and reduce our dependence on oil…delivering Model S is a key part of that plan and represents Tesla’s transition to a mass-production automaker and the most compelling car company of the 21st century.

The beauty of a strategy that turns into a successful company, is that it might take years to roll out and seem obvious only in hindsight. 

This connects to what I like to call the transitional business model.

Or the idea, that many companies, before getting into a fully rolled out business strategy, transition through a period of low scalability and low market size, which will help them gain initial traction. 

As a transitional business model proves viable, it helps the company shape its long-term vision, while its built-in strategy is different from the long-term strategy.

The transitional business model will guarantee survival. It will help further refine the long-term strategy and it will also work as a reality check. 

As the transitional business model proves viable, the company moves to its long-term strategy execution. 

As the business strategy gets rolled out, over the years, it becomes evident and obvious, and yet none managed to pull it off.

When Netflix moved from DVD rental to streaming. DVD rental was the transitional business model that helped Netflix stay in business in the first place.

And yet, when Netflix moved from DVD to streaming it had to apparently change its strategy.

When, in reality, it was rolling out its long-term strategy, shaped by the transitional business model. 

Caveat: Frameworks work until suddenly they don’t

When you stumbled upon a “business formula,” you can’t stop there.

That business formula, if you’re lucky, will allow you to succeed in the long term. Yet as more and more people will find that out, that will lose relevance.

And the matter is, the reality is a villain. Things work for years until they suddenly don’t work anymore.

We’ll see some frameworks, but the real deal is not a framework but the inquiry process that makes us discover those frameworks.

In short, the value is in the repeatable process of discovery and not in the discovery itself. A discovery, once spread, loses value.

Master a business strategy process

There isn’t a size-fits-all business playbook that you can apply to all the scenarios.

Some of the business case studies we’ll see throughout this article will show companies that have dominated the tech space in the last decade and more.

While the playbook executed by those companies worked for the time being.

That doesn’t mean you should play according to their playbook. If at all you’ll need to figure out your own.

Thus, what matters is the process behind finding your business playbook and my hope is that this guide will inspire you and give you some good ideas on how to develop your own business strategy process!

Business strategy case studies

We’ll look now at a few case studies of companies that, at the time of this writing, are playing an important role in the business world.

• Alibaba Business Strategy.
• Amazon Business Strategy.
• Apple Business Strategy.
• Airbnb Business Strategy.
• Baidu Business Strategy.
• Booking Business Strategy.
• DuckDuckGo Business Strategy.
• Google (Alphabet) Business Strategy.

What is a business model’s essence?

Keeping in mind the distinction between business strategy and business models is critical.

The other element used in this guide is a business model essence.

Shortly, I’ve been looking for a way to summarize the key elements of any business in a couple of lines of text:

Therefore, for the sake of this discussion, you’ll find each company’s business strategy, a business model essence that will help us navigate through the noisy business world.

From there, we’ll see the business strategy of a company.

Alibaba Business Strategy

Business Model Essence : Online Stores Leveraging On An E-Commerce/Marketplace Distribution And Monetization Strategy  

As pointed out in Alibaba’s annual report for 2017:

We derive revenue from our four business segments: core commerce, cloud computing, digital media and entertainment, and innovation initiatives and others. We derive most of our revenue from our core commerce segment, which accounted for 85% of our total revenue in fiscal year 2017, while cloud computing, digital media and entertainment, and innovation initiatives and others contributed 4%, 9% and 2%, respectively. We derive a substantial majority of our core commerce revenue from online marketing services. 

Alibaba, like Amazon , became an “everything store” in China.

It leveraged its success to build also other media platforms ( Youku Todou and UCWeb). The e-commerce, marketplace business model has become quite common since the dawn of the web.

From that business model tech giants like Amazon , eBay and Alibaba have raised.

Alibaba’s vision, mission, and core principles

Alibaba’s Business Strategy starts from its core values defined in its annual report:

• Customer First : “The interests of our community of consumers, merchants, and enterprises must be our first”
• Teamwork: “ We believe teamwork enables ordinary people to achieve extraordinary things.”
• Embrace Change   I”n this fast-changing world, we must be flexible, innovative, and ready to adapt to new business conditions in order to maintain sustainability and vitality in our business.”
• Integrity “We expect our people to uphold the highest standards of honesty and to deliver on their commitments.”
• Passion “We expect our people to approach everything with fire in their belly and never give up on doing what they believe is right.”
• Commitment  “Employees who demonstrate perseverance and excellence are richly rewarded. Nothing should be taken for granted as we encourage our people to “work happily and live seriously.”

Alibaba’s mission is “ to make it easy to do business anywhere, ” and its vision is “to build the future infrastructure of commerce… a company that would last at least 102 years.”

For that vision to be executed it has three major stakeholders: users, consumers, and merchants.

The focus on the “at least 102 years” might seem fluffy words, yet those are important as this kind of goal helps you keep a long-term vision while executing short-term plans.

It isn’t unusual for founders to set such visions, as they help keep the company on track in the long run.

And this is where a business strategy starts.

All the business models designed by Alibaba will follow its vision, mission, and values they aim to create in the long run.

Read : Alibaba Business Model

Alibaba ecosystem and value proposition

These elements gave rise to an ecosystem made of “consumers, merchants, brands, retailers, other businesses, third-party service providers and strategic alliance partners.”

As Alibaba points out in its annual report “our ecosystem has strong self-reinforcing network effects benefitting its various participants, who are in turn invested in our ecosystem’s growth and success.”

Network effects are a critical ingredient for marketplaces’ success.

To give you an idea, the more buyers join the platform, the more Alibaba’s recommendation engine will be able to suggest relevant items to buy for other customers, and at the same time the more merchants will join in, given the larger and larger business opportunities.

Keeping these network effects going is a vital element of long-term success but also among the greatest challenge of any marketplace that wants to be relevant.

Even though Alibaba’s essence is in online commerce, the company has several business model s running and a business strategy that at its core is evolving quickly.

Thus, the core commerce has made it possible for Alibaba to build a whole new set of “companies within a company.”

From digital entertainment and media, logistics services, payment, financial services, and cloud services with Alibaba Cloud.

Thus, from a successful existing online business model , Alibaba has expanded in many other areas.

And its future business strategy focuses on developing, nurturing, and growing its ecosystem.

More precisely, its strategic long-term goal is to “serve two billion consumers around the world and support ten million businesses to operate profitably on its platforms”

To achieve that Alibaba is focusing on three key activities:

• Globalization.
• Rural expansion.
• And big data and cloud computing.

For its core commerce activities, Alibaba has designed a value proposition that moves around a few pillars:

• Broad selection: over 1.5 billion listings as of March 31, 2018.
• Convenience:  seamless experience anytime, anywhere from online and offline.
• Engaging, personalized experience: personalized shopping recommendations and opportunities for social engagement.
• Value for money: competitive prices offered via a marketplace business model.
• Merchant quality: review and rating system to keep merchants’ quality high.
• Authentic products: merchant quality ratings, clear refund, and return policies, and the Alipay escrow system.

From that value proposition , Alibaba has been able to grow its customer base and offer wider and broader products, until it expanded in the service and cloud business.

Amazon Business Strategy

Business Model Essence : E-Commerce/Marketplace Distribution And Monetization Model Leveraging On Proprietary Infrastructure To Offer Third-Party Services

Starting in 1994 as a bookstore, Amazon soon expanded and became the everything store.

While the company’s core business model is based on its online store.

Amazon launched its physical stores, which generated already over five billion dollars in revenues in 2017.

Amazon Prime (a subscription service) also plays a crucial role in Amazon’s overall business model , as it makes customers spend more and be more loyal to the platform. 

Besides, the company also has its cloud infrastructure called AWS, which is a world leader and a business with high margins. Amazon also has an advertising business worth a few billion dollars.

Thus, the Amazon business model mix looks like many companies in one. Amazon measures its success via a customer experience obsession, lowering prices, stable tech infrastructure, and free cash flow generation.

Therefore, even though in the minds of most people Amazon is the “everything store.”

In reality, its revenue generation shows us that it has become a way more complex organization, that also has a good chunk of advertising revenue and third-party services.

For instance, Amazon is also a key player with its AWS in the cloud space.

And is well a key player in the digital advertising space, together with Google and Facebook :

Amazon has been widely investing in its technological infrastructure since the 2000s, which eventually turned into a key component of its business model .

Read : Amazon Business Model

Amazon’s vision, mission, and core values

Jeff Bezos is obsessed with being in “day one,” which as he puts it , “ day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always  Day 1. “

It all starts from there, and to achieve that Jeff Bezos has highlighted a few core values that makeup Amazon ‘s culture and vision :

• Customer obsession.
• Resist proxies.
• Embrace external trends.
• High-velocity decision-making.

As pointed out by Amazon , “w hen Amazon.com launched in 1995, it was with the mission “ to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. ” 

This goal continues today, but Amazon ’s customers are worldwide now and have grown to include millions of Consumers, Sellers, Content Creators, and Developers & Enterprises.

Each of these groups has different needs, and we always work to meet those needs, innovating new solutions to make things easier, faster, better, and more cost-effective.”

In this case, Amazon ‘s mission also sounds like a vision statement.

Whatever you want to call it, this input is what makes a company look for long-term goals that keep them on track.

Of course, that doesn’t mean a well-crafted vision and mission statement is all that matters for business success.

Yet, it is what keeps you going when things seem to go awry.

Amazon moved from an online book store to the A-to-Z store it kept its mission almost intact while scaling up.

Start from a proof of concept, then scale up

It is interesting to notice how businesses evolve based on their commercial ability to scale up.

When Amazon started up as a bookstore, it made sense for several reasons, that spanned from logistics to pricing modes and industry specifics.

Yet, when Amazon finally proved that the whole web thing could be commercially viable, it didn’t wait, it grew rapidly.

From music to anything else it didn’t happen overnight, but it did happen quickly.

Thus, this is how Amazon’s mission shifted from “any book in the world” to “anything from A-Z.”

This isn’t a size-fits-all strategy. Amazon chose rapid growth, similar to a blitzscaling process as aggressive growth was a way to preserve itself.

Hadn’t Amazon grown so quickly, it could have been killed.

The opposite approach to this kind of strategy is a bootstrapped business, which is profitable right away and self-sustainable.

Decentralized and distributed value creation: the era of platforms and ecosystems

Before we move forward, I want to highlight a few key elements to have a deeper understanding of both Amazon and Alibaba’s business models and their strategies.

Before digitalization would show its use and commercial viability, most of the value creation processes were internalized.

That meant companies had to employ massive resources to generate value along that chain.

That changed when digitalization allowed the value creation process to be distributed, and we moved from centralized to grassroots content creation.

This is even clearer in the case of platforms, and marketplaces like Amazon and Alibaba.

For instance, where in the past the review process and quality insurance would be done centrally by making sure that the supply complied with the company’s quality guidelines.

Introducing distributed review systems, where the end-users checked against the quality compliance, allowed companies like Alibaba and Amazon to generate network effects, where the more users enriched the platforms with those reviews the more the platform could become valuable.

For that matter though, the main platform’s role will be to fight spam and attempt to trick the system.

Other than that (fighting spam is a challenging task) all the rest is managed at the decentralized level, and the value creation happens when more and more users review products and services on those platforms.

We’re referring here to the review system, but it applies almost to any aspect of a platform.

Amazon for years allowed third-party to feature their stores on Amazon ‘s platform, while they kept the inventory.

This meant an outsourced and distributed inventory system, spread across the supply side.

Therefore, the supply side not only made the platform more valuable by creating compelling offerings.

But it also made it more valuable from the operational standpoint, by allowing a better inventory system, which could be turned quickly.

Therefore, the critical aspect to understand in the digital era is decentralized value creation, which makes the value creation process less expensive for an organization, more valuable to its end users, and more scalable as it benefits from network effects.

How do decentralize value creation?

Many platform-like business models have leveraged a few aspects:

• User-generated content (Quora, Facebook , Instagram).
• Distributed inventory systems ( Amazon , Alibaba).
• Peer-to-peer networks ( Airbnb , Uber).

This implies a paradigm shift.

When you start thinking in terms of platforms, no longer you’ll need a plethora of people taking care of each aspect of it.

Rather you’ll need to understand how the value creation can be outsourced to a community of people and make sure the platform is on top of its game in a few aspects.

For instance, Amazon and Alibaba have to make sure their review system isn’t gamed. Airbnb has to make sure to be able to guarantee safety in the interactions from host to guests and vice-versa.

Quora has to make sure to keep its question machine to keep generating relevant questions for users to answer (the supply-side).

If you grasp this element of a platform, you’re on a good track to understanding how to build a successful platform or marketplace.

Apple Business Strategy

Business Model Label : Product-Based Company Leveraging On Locked-In Ecosystems With A Reversed Razor And Blade Business Strategy

Apple sells its products and resells third-party products in most of its major markets directly to consumers and small and mid-sized businesses through its retail and online stores and its direct sales force.

The Company also employs a variety of indirect distribution channels , such as third-party cellular network carriers, wholesalers, retailers, and value-added resellers.

During 2017, the Company’s net sales through its direct and indirect distribution channels accounted for 28% and 72%, respectively, of total net sales.

Many people look at the iPhone, or the previous products Apple has launched successfully in the last decade and assume that their success is due to those products.

In reality, Apple has followed throughout the years a strategy that focused on five key elements:

• Strong branding.
• Beautifully crafted products.
• Technological innovation.
• Strong distribution.
• Locked-in ecosystems.

In short, Apple can sell an iPhone at a premium price because it employs a reversed razor and blade strategy.

This strategy implies free access to Apple’s Ecosystem (ex. iTunes, and Apple Store).

That makes the whole experience through Apple’s devices extremely valuable.

Thanks to that experience, the perception of high-end (luxury-like) products, together with a reliable distribution, justifies Apple’s premium prices.

Apple’s managed to build a business platform on top of the iPhone, thus creating a strong competitive moat, which lasts to these days:

Therefore, Apple’s future success can’t be measured with the same lenses as the last decade.

The real question is: what product will Apple  be able to launch successfully?

And keep in mind it’s not just about the product. Apple’s formula summarized above can be replicated over and over again.

But it isn’t a simple formula. And as locked-in ecosystems, in which Apple controls as much as possible, the experience of its users has proved quite successful in the last decade.

That might not be so in the next, given the rise of more decentralized infrastructure.

For that matter, Amazon might be well moving from a reversed razor and blade model:

To a service-based model:

This isn’t surprising, as a service business has a few compelling advantages:

• High margins.
• A relatively stable revenue stream.
• Scalability.

As Apple has relied on home runs with its products, from the new Mac to the iPod, iPhone, and iPhones, that kind of success isn’t easy to replicate, and it makes the company relies on a continuous stream of fresh sales to keep the business growing.

A service business would balance things out.

It is important to remark this isn’t something new to Apple :

When Apple introduced the iPhone, it isn’t like it was an overnight success. It was successful, but it had to create a whole ecosystem to make the iPhone a continuous source of growth for the company!

When it comes to business strategy, as pointed out in Apple’s annual reports:

The Company is committed to bringing the best user experience to its customers through its innovative hardware, software and services. The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design, superior ease-of-use and seamless integration.

Understanding this part is critical. As I explained above, at the time of this writing many think of Apple as the “iPhone company.”

Yet Apple is way more than that, and its business strategy is a mixture of creating ecosystems by leveraging on these pillars:

• Operating systems.
• Applications software.
• Innovative design.
• Ease-of-use.
• Seamless Integration.

Those elements together make Apple ‘s products successful. As Apple further explained:

As part of its strategy, the Company continues to expand its platform for the discovery and delivery of digital content and applications through its Digital Content and Services, which allows customers to discover and download or stream digital content, iOS, Mac, Apple Watch and Apple TV applications, and books through either a Mac or Windows personal computer or through iPhone, iPad and iPod touch® devices (“iOS devices”), Apple TV, Apple Watch and HomePod.

Once again, it isn’t anymore about creating a product, but about generating self-serve ecosystems.

How do you support those ecosystems?

It depends on what’s your target. A media company will primarily need an ecosystem made of content creators (take Quora or Facebook or YouTube ).

In many cases, a digital media company over time has to be able to nurture several communities to create a thriving ecosystem.

For instance, large tech companies or startups, often rely on several communities:

• Programmers and developers ( Google , Apple ).
• Content creators and publishers ( Google , Quora, YouTube ).
• Artists and creative talents ( Apple , YouTube ).

In Apple ‘s case though, the first ecosystem is the community of developers building third-party software products that complement the company’s offering:

The Company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings.

When you combine that with a high-touch strategy (where skilled and knowledgeable salespeople interact with customers) you create a flywheel, where customers are retained for longer, the brand grows as a result of this high-touch activity which creates a better post-sale experience and triggers word of mouth and referral from existing customers:

The Company believes a high-quality buying experience with knowledgeable salespersons who can convey the value of the Company’s products and services greatly enhances its ability to attract and retain customers.Therefore, the Company’s strategy also includes building and expanding its own retail and online stores and its third-party distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience.The Company believes ongoing investment in research and development (“R&D”), marketing and advertising is critical to the development and sale of innovative products, services and technologies.

Read : Apple Business Model

Airbnb Business Strategy

Business Model Essence : Peer-To-Peer House-Sharing Network With Fee-Based Monetization Strategy

As a peer-to-peer network, Airbnb allows individuals to rent from private owners for a fee.

Airbnb charges guests a service fee between 5% and 15% of the reservation subtotal; While the commission from hosts is generally 3%.

Airbnb also charges hosts who offer experiences a 20% service fee on the total price.

The digitalization that happened in the last two decades has facilitated the creation of peer-to-peer platforms in which business models disrupted the hospitality model created in the previous century by hotel chains like Marriott, Holiday Inn, and Hilton.

Airbnb is quickly branching out toward offering more experiences. We can call Airbnb the “marketplace of experiences.”

In short, just like Amazon started from books, Airbnb has started from house-sharing.

But that is the starting point, which gives the innovative company enough traction to validate its whole business model and expand to other areas.

The principal aim of Airbnb is to control the whole experience for its users. This means creating an end-to-end travel experience that embraces the entire process .

Thus, it’s not surprising that we’ll see Airbnb expanding its marketplace to more and more areas. This is also shown by the fact that Airbnb might soon offer bundled travel packages .

Just as we’ve seen in the case of Alibaba and Amazon , Airbnb follows a marketplace logic, where it needs to make the interactions between its key users (hosts and guests) as smooth as possible, with an emphasis on safety.

As a platform, Airbnb initially used a strategy of improving the quality of its supply by employing freelance photographers that could take pictures of host homes.

This, in turn, made those homes more interesting for guests, as they could appreciate those homes more.

As many people in real estate might know, the quality of the pictures is critical.

Although this might sound trivial, this is what improved the Airbnb supply side.

Indeed with better and professionally taken images, Airbnb improved its reach via search engines (yes, search engines are thirsty for fresh and original content, images comprised).

And it enhanced the experience of its potential customers.

Now Airbnb is converting its business model to digital experiences. In addition to changing the whole strategy.

Whereas Airbnb focused in the past on covering major cities across the world.

Changing travel habits made Airbnb focus on digital experiences and local, extra-metropolitan areas throughout the pandemic.

While, post-pandemic, as people travel for longer stays, the whole platform has been structured around these. 

Read : Airbnb Business Model

Baidu Business Strategy

Business Model Essence :  Online Marketing Free Services Advertising-Supported Revenue Model

Baidu makes money primarily via online marketing services (advertising). In fact, in 2017, Baidu made about $11.24 in online marketing services and a remaining almost $1.8 billion through other sources. According to Statista,

Baidu has an overall search market share of 73.8% of the Chinese market. Other sources of revenues comprise membership services of iQIYI (an innovative market-leading online entertainment service provider in China) and financial services.

At first sight, Baidu might seem the mirror image of Google , but in China.

However, this is a superficial view. While Baidu has followed in China a similar path to Google , it did take advantage of the fact that Google wasn’t available there, to build its dominant position.

Baidu also has a more efficient cost structure than Google. It had also introduced innovations in its search products (like voice search devices for kids) at a time when Google wasn’t there yet.

Read : Baidu Business Model

Baidu mission: two-pillar business strategy and value propositions acting as a glue for its key users/customers

In the past years, Baidu has followed an expansion business strategy focused on acquiring assets and companies that complemented its core business model .

As the leading Chinese search provider, in 2017, Baidu updated its mission to “ Baidu aims to make a complex world simpler through technology.”

This mission is achieved via a two-pillar strategy:

• Strengthening the mobile foundation (similar to Google’s mobile-first).
• And leading in artificial intelligence.

Baidu’s key partners comprise users, customers, Baidu union members, and content providers.

For each of those critical segments, Baidu has drafted a fundamental value proposition .

Thus, to generate a value chain that works for these stakeholders, Baidu has to balance it with a diversified value proposition :

• Users:  enjoying Baidu search experience want a search engine that gives them relevant results.
• Customers: with 775,000 active online marketing customers in 2017, consisting of SMEs, large domestic businesses, and multinational companies, distributed across retail and e-commerce, network service, medical and healthcare, franchise investment, financial services, education, online games, transportation, construction and decoration, and business services. Those businesses look for a trackable, and sustainable ROI for their paid advertising campaigns. By bidding on keywords, they can target specific audiences.
• Baidu Union Member: share revenues with Baidy by displaying banner ads on their sites in relevant spaces filled by the  Baidu search algorithm (think of it as Google’s AdSense Network ). Those publishers and sites can generate additional revenues and monetize their content without relying on complex infrastructure, that instead is employed by Baidu.
• Content Providers:  video copyright holders, app owners who list their apps on the Baidu app store, users who contribute their valuable and copyrighted content to Baidu products, and publishers. Those users get visibility or money in exchange for this content. Baidu has to make sure to allow those content providers to get in exchange for their work and creativity visibility and revenues.

Understanding how the value proposition for each player comes together is critical to understanding the business decisions a company like Baidu makes over time.

For instance, as Baidu (like Google ) moves more and more toward AI, the need to balance the value proposition for Baidu Union Members might fickle.

Booking Business Strategy

Business Model Essence :  House-Sharing Platform Leveraging On A Two-Sided Marketplace With A Commission-Based Revenue Model

Booking Holdings is the company that controls six main brands that comprise Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable. 

Over 76% of the company’s revenues in 2017 came primarily via travel reservations commissions and travel insurance fees.

Almost 17% came from merchant fees, and the remaining revenues came from advertising earned via KAYAK.

As a distribution strategy, the company spent over $4.5 billion on performance-based and brand advertising.

Read : Booking Business Model

Booking mission, value proposition, and key players

Booking’s mission is to “help people experience the world.” Booking does that via a few primary brands:

• Booking.com.
• priceline.com.
• Rentalcars.com.

The mission of helping people experience the world is executed via three primary value propositions delivered to consumers, travelers, and business partners:

• Consumers are provided what Booking calls “the best choices and prices at any time, in any place, on any device.”
• People and travelers can easily find, book, and experience their travel desires.
• Business partners (like Hotels featured on Booking.com) are provided with platforms, tools, and insights in exchange.

Boomedium-term term strategy is focused on:

• Leveraging technology to provide the best experience.
• Growing partnerships with travel service providers and restaurants.
• Investing in profitable and sustainable growth.

DuckDuckGo Business Strategy

Business Model Essence : Privacy-based Search Engine Built On Google’s Weakness With An affiliate-based Revenue Model

DuckDuckGo makes money in two simple ways: Advertising and Affiliate Marketing.

Advertising is shown based on the keywords typed into the search box. Affiliate revenues come from Amazon and eBay affiliate programs.

When users buy after getting on those sites through DuckDuckGo the company collects a small commission.

While this model might not sound that exciting. DuckDuckGo managed to grow quickly by leveraging Google’s primary weakness: users’ privacy. Where Google’s primary asset is made of users’ data. DuckDuckGo throws that data away on the fly:

It is important to remark that DuckDuckGo is still figuring out a business model that can make it sustainable in the long term.

Indeed, the company got a venture round of $10 million back in August 2018.

DuckDuckGo will be tweaking its business model in the coming years, to reach a “ business model /market fit.”

Read : DuckDuckGo Business Model

Read : DuckDuckGo Story

Google (Alphabet) Business Strategy

Business Model Essence :  Free Search Engine Distributed Across Hardware, Browsers, And Members’ Websites With An Hidden Revenue Generation Model

As of 2017, over ninety billion dollars, which consisted of 86% of Google ’s revenues came from advertising networks.

The remaining fraction (about 13%) came from Apps, Google Cloud, and Hardware. While a bit more than 1% came from bets like Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X.

Google business model is changing over the years.

Even though advertising is still its cash cow, Google has been diversifying its revenues in other areas. 

While in 2015 90% of Google’s revenues came from advertising, in 2017, advertising revenues represented 86%.

Other revenues grew from about 10% in 2015 to almost 13% in 2017.

Why did Google get there? And where is Google going next? To understand that you need to understand the “moonshot thinking.”

Read : Google Business Model

Read : Google Cost Structure

Read : Baidu vs. Google

Understanding Google’s moonshot thinking and a breakthrough approach to business

As highlighted in the Alphabet annual report for 2018:

Many companies get comfortable doing what they have always done, making only incremental changes. This incrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not evolutionary. People thought we were crazy when we acquired YouTube and Android and when we launched Chrome, but those efforts have matured into major platforms for digital video and mobile devices and a safer, popular browser. We continue to look toward the future and continue to invest for the long-term. As we said in the original founders’ letter, we will not shy away from high-risk, high-reward projects that we believe in because they are the key to our long-term success.

Understanding the moonshot approach to business is critical to understanding where Google (now Alphabet) got where it is today, and where it’s headed next.

Since the first shareholders’ letter from Google’s founders, Brin and Page they highlighted that “ Google is not a conventional company. We do not intend to become one.”

Google has successfully built ecosystems that today drive

To understand where Google is going next, you need to look at the AI Economy , in which the tech giant is trying to lead the pack.

Whether or not it will be successful will highly depend on its ability to keep creating successful ecosystems, just as Google has done with Google Maps (you might not realize but Google Maps powers up quite a large number of applications) and Android.

At the time of this writing, Google is widely investing in other areas, such as:

• Voice search.
• AI and machine learning applications.
• Self-driving cars.
• And other bets.

If that is not sufficient Google has made several moves in different spaces, to keep its dominance on mobile, while moving toward voice search, like the investment in KaiOS, which business model is interesting as it finally allows an ecosystem to be built on top of cheap mobile devices in developing countries:

That is why Google keeps making “smaller bets in areas that might seem very speculative or even strange when compared to its current businesses.”

Those other bets made “just” $595 million to Google in 2018.

This represented 0.4% of Google ‘s overall revenues , compared to the over $136 billion coming from the other segments.

Google ‘s North Star is its mission of “ organizing the world’s information and making it universally accessible and useful.” 

Read : KaiOS Business Model

Let’s go through a few other tips for a successful business strategy. 

Problem-first approach

The customer-problem quadrant by LEANSTACK’s Ash Maurya is a great starting point to define and understand the problem, that as an entrepreneur you will going to solve. 

Indeed, a successful business is such, based on the market’s rewards for the entrepreneur’s ability to solve a problem.

Keep in mind that defining and understanding problems in the real world is one of the most difficult things (that is why entrepreneurship is so hard).

To properly stumble on the right definition of the problem you’re solving, there might be some fine-tuning going on, which in the business world we like to call product-market fit . 

Business engineering skills

Another key element is not to lose sight of the context you’re operating.

As such, analyzing that properly might require some business engineering skills . 

To simplify your life you can use the FourWeekMBA business analysis framework.

Don’t strategize on a piece of paper

Strategies always work well on a piece of paper.

Yet when execution comes suddenly we can realize all the drawbacks of that.

In very few, rare cases, a designed strategy will work as expected.

However, the reason we plan and strategize isn’t just to make things work as we’d like them to.

But to communicate a vision we have to those people (employees, customers, stakeholders) who will help us get there. 

That is why when we strategize it’s important not to lose sight of the essence of our strategy, which is the long-term vision we have for our business.

The rest is execution, practice, and a lot of experimentation!

The innovation loop

Innovation starts by tweaking, testing, and experimenting also in unexpected ways.

Often though, as a business strategy is documented after the fact, it seems as if it was all part of a plan. 

In most cases, the innovation loop starts by stumbling upon that thing that will have a great impact on your business.

Therefore, as an entrepreneur, you need to keep pushing on those models that worked out.

But also to be on the lookout for new ways of doing things. 

Barbell approach 

In a barbel approach we want to have a clear distinction between two domains: 

• Core business : on the core business side, where you have a consolidated strategy, and a business model that has proved to work, it’s important to be structured. This means having a clear culture, following given processes, and slowly evolving your business model. 
• New bets : as your business model will become outdated over time, and that might happen also very quickly, you need to be on the lookout for new opportunities emerging, also in new, completely unrelated business fields. 

For instance, a tech giant like Google, has a part of its business skewed toward a few bets it placed on industries that are completely unrelated to its core business (search).

Those bets are not contributing at all to its bottom line (only some of those bets are generating revenues but those are extremely marginal compared to the overall turnover of the company). 

However, those might turn out widely successful (or huge failures) in the years to come. 

Thus, with a barbell approach, we want to consolidate what we have. But also be open to what might be coming next!

Business Explorers

Strategic analysis thinking tools.

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions , to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Business model canvas

The business model canvas aims to provide a keen understanding of your business model to provide strategic insights about your customers, product/service, and financial structure;

so that you can make better business decisions.

Blitzscaling canvas

In this article, I’ll focus on the Blitzscaling business model canvas. This is a model based on the concept of Blitzscaling.

That is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency. It focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.

Pretotyping

Pretotyping is a mixture of the words “pretend” and “prototype,” and it is a methodology used to validate business ideas to improve the chances of building a product or service that people want.

The pretotyping methodology comes from Alberto Savoia’s work summarized in the book “The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed.”

This framework is a mixture of the words “pretend” and “prototype,” and it helps to answer such questions (about the product or service to build) as: Would I use it? How, how often, and when would I use it?

Would other people buy it? How much would they be willing to pay for it? How, how often, and when would they use it?

Value innovation and blue ocean strategy

A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created.

At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken.

Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Growth hacking process

Growth hacking is a process of rapid experimentation, coupled with the understanding of the whole funnel, where marketing , product, data analysis, and engineering work together to achieve rapid growth.

The growth hacking process goes through four key stages analyzing, ideating, prioritizing, and testing.

Pirate metrics

Venture capitalist , Dave McClure, coined the acronym AARRR which is a simplified model that enables us to understand what metrics and channels to look at. At each stage of the users’ path toward becoming customers and referrers of a brand.

Engines of growth

In the Lean Startup, Eric Ries defined the engine of growth as “the mechanism that startups use to achieve sustainable growth.”

He described sustainable growth as following a simple rule, “new customers come from the actions of past customers.”

The three engines of growth are the sticky engine, the viral engine, and the paid engine. Each of those can be measured and tracked by a few key metrics, and it helps plan your strategic moves.

The RTVN model is a straightforward framework that can help you design a business model when you’re at the very early stage of figuring out what you need to make it succeed.

Sales cycle

A sales cycle is the process that your company takes to sell your services and products.

In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.

Planning ahead of time the steps your sales team needs to take to close a big contract can help you grow the revenues for your business.

Comparable analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company.

To find comparables, you can look at two key profiles: the business and economic profiles.

From the comparable company analysis, it is possible to understand the competitive landscape of the target organization.

Porter’s five forces

Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition.

It was published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s.

The model breaks down industries and markets by analyzing them through five forces which you can use to have a first assessment of the market you’re in.

Porter’s Generic Strategies

Porter’s Value Chain

Porter’s Diamond Model

Bowman’s Strategy Clock

VMOST Analysis

Fishbone Diagram

GE McKinsey Matrix

VRIO Framework

3C Analysis

AIDA stands for attention, interest, desire, and action. This is a model that is used in marketing to describe the potential journey a customer might go through, before purchasing a product or service. The variation of the AIDA model is the CAB model and the AIDCAS model.

PESTEL analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization.

This is a critical step that helps organizations identify potential threats and weaknesses. That can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Technology adoption curve

The technology adoption curve is a model that goes through five stages. Each of those stages (innovators, early adopters, early majority, late majority, and laggard) has a specific psychographic that makes that group of people ready to adopt a tech product.

This simple concept can help you define the right target for your business strategy.

Business model essence

A Business Model Essence, according to FourWeekMBA, is a way to find the critical characteristics of any business to have a clear understanding of that business in a few sentences.

That can be used to analyze existing businesses. Or to draft your Business Model and keep a strategic and execution focus on the key elements to be implemented in the short-medium term.

FourWeekMBA business model framework

An effective business model has to focus on two dimensions: the people dimension and the financial dimension. The people dimension will allow you to build a product or service that is 10X better than existing ones and a solid brand.

The financial dimension will help you develop proper distribution channels by identifying the people that are willing to pay for your product or service and make it financially sustainable in the long run.

TAM, SAM, and SOM

Understanding your TAM, SAM and SOM can help you navigate the market you’re in and to have a laser focus on the market you can reach with your product and service.

Brand Building

Value Proposition Design

Product-Market Fit

Freemium Decision Model

Organizational Design And Structures

Speed-Reversibility Matrix

Minimum Viable Product

SWOT Analysis

Revenue Modeling

Business Experimentation

Business Analysis

Ansoff Matrix

Key takeaway

I hope that in this guide you learned the critical aspects related to business strategy, with an emphasis on the entrepreneurial world. If business strategy would only be an academic discipline disjoined from reality, that would still be an interesting domain, yet purely speculative.

However, as a business strategy can be used as a useful tool to leverage on to build companies, hopefully, this guide will help you out in navigating through the seemingly noisy and confusing business world, dominated by technology. As a last but critical caveat, there isn’t a single way toward building a successful business.

And oftentimes the way you choose to build a business is really up to you, how you want to impact a community of people and your vision for the future!

Other resources: 

• Types of Business Models You Need to Know
• What Is a Business Model Canvas? Business Model Canvas Explained
• Blitzscaling Business Model Innovation Canvas In A Nutshell
• What Is a Value Proposition? Value Proposition Canvas Explained
• What Is a Lean Startup Canvas? Lean Startup Canvas Explained
• How to Write a One-Page Business Plan
• How to Build a Great Business Plan According to Peter Thiel
• How To Create A Business Model
• What Is Business Model Innovation And Why It Matters
• What Is Blitzscaling And Why It Matters
• Business Model Vs. Business Plan: When And How To Use Them
• The Five Key Factors That Lead To Successful Tech Startups
• Business Model Tools for Small Businesses and Startups

Additional Business Strategy Tactics

Blue ocean player.

Blue Sea Player

Constructive Disruptor

Niche player

Blitzscaler

Continuous Blitzscaler

What is business strategy?

What are examples of business strategies.

Things like product differentiation, business model innovation, technological innovation, more capital for growth, can all be moats that organizations focus on to gain an edge. Depending on the context, industry, and scenario, a business strategy might be more or less effective; that is why testing and experimentation are critical elements.

Connected Strategy Frameworks

ADKAR Model

Business Model Canvas

Lean Startup Canvas

Blitzscaling Canvas

Blue Ocean Strategy

Business Analysis Framework

Balanced Scorecard

Blue Ocean Strategy 

GAP Analysis

GE McKinsey Model

McKinsey 7-S Model

McKinsey’s Seven Degrees

McKinsey Horizon Model

Porter’s Five Forces

Porter’s Value Chain Model

PESTEL Analysis

Scenario Planning

STEEPLE Analysis

FourWeekMBA Business Toolbox

Business Engineering

Tech Business Model Template

Web3 Business Model Template

Asymmetric Business Models

Business Competition

Technological Modeling

Transitional Business Models

Minimum Viable Audience

Business Scaling

Market Expansion Theory

Speed-Reversibility

Asymmetric Betting

Growth Matrix

Revenue Streams Matrix

Pricing Strategies

Other business resources:

• What Is Business Model Innovation
• What Is a Business Model
• What Is Business Strategy
• What is Blitzscaling
• What Is Market Segmentation
• What Is a Marketing Strategy
• What is Growth Hacking

More Resources

About The Author

Gennaro Cuofano

Leave a reply cancel reply, discover more from fourweekmba.

Subscribe now to keep reading and get access to the full archive.

Type your email…

Continue reading

• 70+ Business Models
• Airbnb Business Model
• Amazon Business Model
• Apple Business Model
• Google Business Model
• Facebook [Meta] Business Model
• Microsoft Business Model
• Netflix Business Model
• Uber Business Model

Corporate Level Strategy: Explained with Examples and Types

A corporate-level strategy refers to the overarching strategic plan that dictates the direction of the entire organization. It’s the highest level of strategy, covering all of the firm’s diverse operations, and is typically set by top management and the board of directors.

Key aspects of corporate-level strategy include:

• Growth strategy:  Determining how the corporation plans to grow, whether through internal development (new products, new markets), external methods (acquisitions, mergers, strategic alliances), or a combination of both.
• Stability strategy:  If a corporation is satisfied with its current growth and success rate, it may opt for a stability strategy, which involves maintaining the status quo.
• Retrenchment/turnaround strategy:  When a corporation faces significant problems, it may adopt a retrenchment strategy to realign resources, reduce the size, or improve efficiency to improve financial performance.
• Portfolio management:  At the corporate level, the organization must manage its portfolio of businesses effectively. This can involve deciding to invest in, hold, harvest (reduce investment), or divest certain business units.
• Geographic strategy:  Corporations must also decide on their geographic scope, from local to global. This involves deciding which markets to enter, when, and on what scale.
• Competitive strategy:  This involves the plan of action that a company develops to gain a competitive advantage in its market, such as cost leadership, differentiation, or a focus strategy.

In large corporations with several business units, a corporate strategy also involves deciding how much autonomy to give each business unit, how to allocate resources, and how they should interact with each other. This holistic strategy must align with the organization’s overall mission, vision, and long-term objectives.

Examples of Corporate-Level Strategy

Sure, here are a few examples of corporate-level strategies that well-known companies have implemented:

• Amazon’s Growth Strategy:  Amazon began as an online bookstore but didn’t stop there. It expanded its product line to include electronics, clothing, and more, developing into a comprehensive online retail giant. It also expanded into new business areas like cloud computing services with Amazon Web Services (AWS), which has become a significant part of its business.
• Google’s Diversification Strategy:  Google started as a search engine but, over time, diversified into various other sectors. For example, it acquired YouTube, created Android OS, launched Google Cloud, and ventured into self-driving cars with Waymo. These initiatives have helped Google stay competitive and innovative while spreading risk across various sectors.
• Coca-Cola’s Geographic Expansion Strategy:  Coca-Cola’s corporate strategy involved expanding its geographic footprint from its original base in the US to almost every country in the world. This international expansion allowed Coca-Cola to become one of the most recognized brands globally and helped them diversify their markets, reducing dependence on any single region.
• Facebook’s Acquisition Strategy:  Facebook’s corporate strategy involves acquiring and integrating potential competitors into its portfolio. Some notable examples include Instagram and WhatsApp. These acquisitions helped Facebook grow its user base, diversify its services, and maintain its competitive edge in the social networking industry.
• Microsoft’s Turnaround Strategy:  In the mid-2010s, Microsoft underwent a strategic shift under CEO Satya Nadella. The company transitioned from a “devices and services” strategy to a “cloud-first, mobile-first” approach. This shift led to significant growth in cloud services like Azure and Office 365 and helped Microsoft regain its position as one of the leading tech companies.
• Unilever’s Sustainability Strategy:  Unilever launched the Unilever Sustainable Living Plan in 2010 to reduce its environmental footprint and increase its positive social impact. This strategy, which involves every aspect of the corporation, reflects a commitment to sustainability that is becoming increasingly important to consumers, employees, and stakeholders.

Remember that the success of a corporate-level strategy depends on many factors, including the company’s context, resources, and capabilities, as well as external factors like market trends and competitive landscape.

Types of Corporate-Level Strategy

Corporate-level strategies essentially focus on decisions about what business areas to compete in and how to manage these business areas to achieve corporate goals. Some of the key types of corporate-level strategy include:

• Growth Strategy:  A corporation may decide to expand its activities. This can be accomplished in various ways, such as by developing new products, entering new markets, increasing market share in existing markets, or through mergers and acquisitions. Growth Hacking Strategy: Examples, Case Study, B2B
• Stability Strategy:  This strategy is pursued when a corporation is satisfied with the same business and wants to continue the same activities. It’s often used in a predictable and stable environment where the business operations are successful and there are minimal opportunities or needs for growth.
• Retrenchment Strategy:  This strategy involves reducing the company’s size or diversity, often through selling or closing certain businesses or divisions. This is typically used when a company faces difficulties and needs to refocus its resources on areas where it can be more competitive. What is a Retrenchment strategy: Explained with types & examples
• Diversification Strategy:  Under this strategy, a corporation decides to enter into new markets with new products. Diversification can be related (where the new businesses have some connection to the existing businesses) or unrelated (where the new businesses are not connected to the existing businesses).
• International Strategy:  Companies that expand their operations beyond their home country must adopt an international strategy. This could involve exporting, licensing, franchising, establishing joint ventures with a foreign company, or setting up a wholly-owned subsidiary in another country. International Business, Marketing Strategy & Strategic Management
• Portfolio Strategy:  In this strategy, a corporation manages its businesses as a portfolio, similar to how an investor would manage a portfolio of investments. The corporation invests in business units expected to perform well and divests from those that do not.

Each type of corporate-level strategy provides different ways for a corporation to define and pursue its goals. The best choice of strategy depends on the corporation’s current situation, its resources and capabilities, the environment in which it operates, and the vision of its leadership.

Case Study on Corporate Level Strategy

Let’s take a look at the corporate-level strategy of Disney:

Disney’s Diversification and Expansion Strategy:

Disney, which started in the 1920s as a motion picture company, has successfully adopted a diversification and expansion strategy to evolve into a diversified global entertainment company. This strategy can be seen in the various segments of the company’s operations:

• Theme Parks and Resorts:  Disney’s decision to create Disneyland in the 1950s was a key part of its diversification strategy. The company later expanded this segment by establishing Disney World and international theme parks in Paris, Tokyo, Hong Kong, and Shanghai.
• Media Networks:  Disney diversified into television with the creation of the Disney Channel and later expanded into network television with the acquisition of ABC. It also purchased ESPN to enter into the sports broadcasting market.
• Studio Entertainment:  Disney has continuously expanded its studio entertainment segment by acquiring other studios such as Pixar, Marvel, Lucasfilm (Star Wars franchise), and most recently, 21st Century Fox. These acquisitions have allowed Disney to expand its movie portfolio and capitalize on popular franchises.
• Consumer Products and Interactive Media:  Disney has used its brand and characters to diversify into consumer products and digital games, creating a comprehensive entertainment experience for consumers.
• Disney+:  Seeing the success of streaming services like Netflix and Amazon Prime, Disney launched its streaming service, Disney+, which rapidly gained a substantial subscriber base.

Disney’s corporate-level strategy has been successful because of the synergy between its business units. For example, a movie from Marvel can drive consumer product sales, visits to theme parks, viewership on their media networks, and subscribers for Disney+. This synergy, along with the strong Disney brand, has allowed the company to succeed across various entertainment segments.

Disney’s corporate-level strategy shows how diversification and expansion, coupled with strong execution, can create a leading position in a competitive industry. It’s also a good example of how a company can use its resources (in this case, Disney’s brand and characters) to create synergies between different business units.

Disney’s journey to becoming the World’s greatest storyteller

Related Posts

The Art of Persuasion: Techniques for Influencing Buying Decisions

Organizational Culture: Defining | Improving | Examples

Organizational Restructuring: Meaning | Process | Examples

Examples of supply chain strategy

Entire Supply Chain Strategy Explained

Succession Planning Process in Business

Stability Strategy in Business: Meaning | Types | Examples

Balanced Scorecard | Explained with Examples

Type above and press Enter to search. Press Esc to cancel.

• Scroll to top

•   / Sign Up
• HOW WE HELP CLIENTS
• schedule your conversation

Business Level Strategy Examples & Types for Corporate Strategy Success

Published: 07 February, 2024

Social Share:

Digital Strategy

Get the Full Package for FREE & OpenSource

• Get instant access to this model including a full presentation, related tools and instructions!
• You will equally get instant access to all 50+ UNITE Innovation & Transformation Models!
• Completely FREE and OpenSource!

Table of Contents

In business, the right business strategy can make or break success . Business-level strategy is crucial in defining how a company positions itself within its industry and competes in the market.

Nowadays, successful businesses blend this strategy with digital transformation and innovation strategies. At Digital Leadership, our  Innovation Consulting  and  Digital Transformation Consulting  services, we foster creativity and ensure seamless alignment of technology adoption with  business goals . Our approach involves   integrating Jobs to be Done   into your right  business-level strategy,  focusing on understanding customers’ fundamental needs and motivations to establish meaningful and lasting connections.

Find out how we can help you

Corporate training, innovation consulting and much more.

In this comprehensive guide, we will delve into the definition, examples, types, importance, steps of implementation, and comparison with corporate level strategy of business level strategies . We will also explore successful companies and their effective business-level strategies, providing insights and inspiration for entrepreneurs aiming to achieve sustainable growth.

What is Business Level Strategy Definition

A business level strategy involves the stratgeic planning and actions taken to set the direction for a particular business unit . It’s about how a company aims to excel and gain an edge in a specific market area or industry. This strategy outlines how the business plans to distinguish itself from rivals, deliver value to customers, and reach its business goals within its chosen market.

Benefits of business level strategy encompass heightened revenue generation, enhanced forecasting of future requirements, swifter responses compared to rivals, and a fortified brand capable of navigating changes with resilience. Two prevalent strategies often employed are cost leadership and differentiation.

The Business Model Canvas plays a pivotal role in business level strategy in aligning different elements to ensure that they collectively support the overarching strategic goals. By focusing on customer-centric components and resource allocation, the canvas aids in decision-making crucial to gaining a competitive advantage. Its adaptability allows businesses to innovate and respond to market changes, a vital aspect in executing effective business-level strategies.

Your download is now available!

You can now access the complete Business Model Canvas Package, including a full presentation, related models and instructions for use.

The UNITE Business Model Canvas

Levels of strategy: corporate, business and functional level strategies.

• Corporate Level Strategy: This level of strategy includes decisions related to the overall direction and scope of the organization. It encompasses decisions such as diversification, acquisitions, and strategic alliances to maximize overall corporate performance.
• Business Level Strategy: It focuses on how a business unit or division positions itself within a specific industry or market segment to gain a competitive advantage.
• Functional Level Strategy : Functional level strategy deals with the formulation and implementation of strategies specific to various functional areas within the organization, such as marketing, finance, operations, and human resources.

Business level strategies are narrower than corporate level strategies yet not as narrowly focused as functional level strategies. For instance, if your corporate level strategy aimed to enhance market share, your business level strategy could be: Expand market reach.

To learn more about different Levels of strategies – like corporate and business strategies you will find it in our book “ How to create innovation “. Understanding these strategies will help you make smart decisions for your own organization. Download the book now to start learning and taking control of your strategic planning.

The Only Book On Innovation You’ll Ever Need

+FREE access to 50+ complimentary download packages covering the details with plenty of helpful background information

Business Level Strategy Examples of Successful Companies

Let’s explore examples of successful companies and their business-level strategies:

1) Apple Business Level Strategy

Apple’s successful business-level strategy is based on product differentiation and innovation. By consistently delivering high-quality, innovative products with sleek designs and user-friendly interfaces, Apple has positioned itself as a premium brand in the technology industry.

2) Starbucks Business Level Strategy

Starbucks employs a differentiation strategy by offering a unique and immersive customer experience. Through its cozy atmosphere, personalized service, and premium coffee offerings, Starbucks has built a loyal customer base and differentiated itself from competitors in the coffeehouse industry.

3) Walmart Business Level Strategy

Walmart follows a cost leadership strategy by offering a wide range of products at low prices. By leveraging economies of scale, efficient supply chain management, and strategic partnerships, Walmart, a cost leader in the retail industry, attracts price-conscious consumers.

Five Types of Business Level Strategy

Cost leadership, differentiation, focused low-cost, focused differentiation, integrated, and customer intimacy are successful business-level strategies used to achieve a competitive edge . Business-level strategies can be classified into five main types:

1. The Cost Leadership Strategy

The strategy of cost leadership entails striving to become the most economical producer within an industry. Businesses employing this approach seek to gain a competitive edge by providing products or services at lower prices compared to rivals, all while upholding acceptable quality standards. This tactic enables companies to attract price-sensitive customers and secure a significant share of the market. Through a concerted emphasis on cost efficiency and operational optimization, organizations can achieve cost leadership, establishing themselves as formidable contenders in their respective sectors.

2. The Differentiation Strategy

The differentiation strategy, a variant of business-level strategies, revolves around offering distinctive products or services perceived by consumers as superior in quality, value, or features. By setting themselves apart from competitors, companies can leverage their strategic initiatives to command premium prices and foster customer loyalty.

3. The Focused Leadership Strategy

The focused leadership strategy, commonly known as the niche strategy, entails directing efforts towards a specific market segment or niche with specialized offerings. By addressing the distinct needs and preferences of a narrow customer base, companies can attain a competitive advantage and bolster profitability.

4. The Focused Differentiation Strategy

A focused differentiation strategy blends elements of differentiation and focus strategies by delivering unique products or services tailored to a particular market segment. Firms embracing this strategy aim to carve out a niche market where they can demand premium prices and cultivate strong customer allegiance.

5. The Integrated Cost Leadership / Differentiation Strategy

The integrated cost leadership/differentiation strategy involves concurrently pursuing both cost leadership and differentiation strategies within a single business unit or division. By providing products or services that are both distinctive and cost-effective, companies can embrace a low-cost approach appealing to a broad customer base while sustaining competitive pricing.

Importance of Integrating Business Level Strategy

Integrating business-level strategy into business plan and decision-making processes is crucial for several reasons:

• Alignment with Corporate Strategies: Business-level strategies align with corporate objectives and contribute to the overall success of the organization.
• C reating Unique Value Proposition: It helps companies create unique value propositions that differentiate them from competitors and attract customers.
• Competitive Advantage: Effective business-level strategies provide companies with a competitive advantage in the market, enabling them to outperform rivals.
• Long-term Sustainability : It focuses on long-term sustainability and growth, ensuring the organization’s viability and relevance in the future.
• Optimizing Resource Allocation: By aligning resources with strategic objectives, business level strategies help optimize resource allocation and maximize returns on investment.
• Enhanced Coordination and Collaboration: It promotes coordination and collaboration across different functions and departments, fostering a unified approach towards achieving corporate goals.
• Simplification of Decision Making : Clear and well-defined corporate and business level strategies simplify decision-making processes by demonstrating a roadmap for action and guiding resource allocation.
• Streamlining Adaptation to Market Positioning: It enables organizations to adapt quickly to changes in market conditions and customer preferences, ensuring continued relevance and competitiveness.
• Risk Management: Effective business-level strategies help organizations identify and mitigate risks associated with market dynamics, competitive pressures, and industry disruptions.
• Customer Centricity: It prioritizes customer needs and preferences, driving customer-centric innovation and value creation.

The Value Proposition Canvas is crucial for integrating business-level strategy as it aids in crafting a unique value proposition. By aligning with corporate objectives, it helps businesses differentiate themselves, gain a competitive advantage, and ensure long-term sustainability. Moreover, it optimizes resource allocation, enhances coordination, simplifies decision-making, and streamlines adaptation to market changes. Additionally, it aids in risk management and promotes customer-centricity by focusing on meeting unmet customer needs effectively.

You can now access the complete SWOT Framework Package, including a full presentation, related models and instructions for use.

The SWOT / TOWS Analysis Framework

2) understand the competitive environment.

Analyze competitors’ strengths, weaknesses, strategies, and market positions to identify competitive threats and opportunities. Identify gaps in the market where the organization can gain a competitive advantage.

3) Define Strategic Objectives:

Define clear and measurable objectives aligned with the organization’s mission, vision, and business model values. Set targets for revenue growth, market share, profitability, customer satisfaction, and other key performance indicators (KPIs).

4) Identify Target Customer Segments

Segment the market based on demographic, psychographic, geographic, and behavioural factors to identify target customer segments. Understand the needs, preferences, and purchasing behaviour of target customers to tailor products or services accordingly.

5) Select the Right Business-Level Strategy

Evaluate different business level strategies based on their alignment with strategic objectives, competitive advantage potential, and resource requirements. Choose the successful strategy that best fits the organization’s capabilities, market position, and growth aspirations.

6) Develop Action Plans:

Develop detailed action plans outlining specific initiatives, tasks, timelines, and resource allocations required to implement the chosen business level strategy . Assign responsibilities to team members and define performance metrics for monitoring progress and success.

7) Build Organizational Support Culture

Foster a supportive organizational culture that encourages collaboration, innovation, and continuous improvement. Communicate the rationale behind the chosen business level strategy and engage employees at all levels in the implementation process.

Organizational culture Canvas provides a framework for understanding the values, norms, and behaviors that are desired within the company. By aligning the chosen business-level strategy with the prevailing organizational culture, leaders can ensure consistency and coherence in the implementation process. Leveraging an organizational culture model enhances the cohesion, effectiveness, and sustainability of the business-level strategy implementation process.

You can now access the complete Culture canvas Package, including a full presentation, related models and instructions for use.

The UNITE Culture Canvas

8) implement and monitor key performance indicators (kpis).

Implement the action plans and monitor key performance indicators (KPIs) to track progress and identify areas for improvement. Regularly review and analyze KPIs to ensure that the business level strategy is on track to achieve its objectives.

9) Evaluate the Effectiveness of the Strategy

Conduct regular reviews and evaluations to assess the effectiveness of the business level strategy in achieving strategic objectives. Identify lessons learned and make necessary adjustments for optimizing performance and driving sustainable growth through strategic planning.

Business Level Strategy vs Corporate Level Strategy

While business-level strategy focuses on how a business unit or division competes in a specific market segment, corporate-level strategy deals with the overall direction and scope of the organization as a whole. While business-level strategy determines how a company positions itself within its industry, corporate-level strategy defines the portfolio of businesses and the allocation of resources across them to maximize overall corporate performance.

In conclusion, business level strategy plays a crucial role in driving sustainable growth and competitive advantage for organizations. By understanding the definition, examples, types, importance, steps of implementation, and comparison of corporate and business-level strategies , entrepreneurs can develop and execute effective strategies that position their modern businesses for long-term success in dynamic and competitive markets.

Frequently Asked Questions

1) what is the advantage of setting business-level strategies.

Setting business-level strategies provides several advantages, including:

• Competitive Advantage: It enables companies to gain a competitive advantage in the market by differentiating themselves from competitors and creating unique value propositions for customers.
• Resource Allocation: It helps optimize resource allocation by aligning resources with strategic objectives and focusing investments on areas with the highest potential for growth and profitability.
• Long-term Sustainability: Effective business-level strategies contribute to the long-term sustainability and success of the organization by ensuring continued relevance and competitiveness in the market.

2) How often should a business-level strategy be reassessed?

It should be reassessed regularly to ensure alignment with changing market dynamics, competitive pressures, and organizational capabilities. Depending on the pace of change in the industry and the organization’s strategic priorities, business-level strategies may need to be reviewed and adjusted annually, quarterly, or even more frequently.

3) Business-level strategy addresses which overarching question?

It addresses the overarching question of how a business unit or division positions itself within its industry or market segment to gain a competitive advantage and achieve its successful business goals . It focuses on defining the approach and tactics necessary to differentiate the organization from competitors and create value for customers in the chosen market.

Related Posts

Digital business strategy examples, definition, and strategies.

In a time marked by rapid technological evolution and unprecedented interconnectedness, businesses1

Business Capability Map Model for Mapping Business Capabilities

To create successful innovations, it's crucial to leverage the existing strengths of1

Digital Transformation Meaning and Implementing DX Steps

Digital transformation has become a buzzword in the business world, and for1

Unfair Advantage: What is it, and how do you find yours?

Every business, everywhere, is hoping it can provide something to customers that1

Ambidextrous Organization: Examples, Definition, Levels & Benefits

Ambidextrous organizations are a concept that has been gaining traction in the1

Recent Posts

Innovation Strategy: Developing Innovative Strategies in Business

Social ShareInnovation has become an imperative for organizations worldwide, yet the multitude...

Porter’s Generic Strategies Tips for Business Competitive Strategy 

Social ShareIn business competition, understanding and effectively implementing strategic frameworks are crucial...

Get access to the UNITE Models now!

Discover the largest library of innovation & transformation tools on the internet!

First name *

Last name *

Professional E-mail *

Choose Your Password *

Confirm Your Password *

I want to be kept up-to-date and accept the privacy statement *

By signing up, you agree to receive news and accept the privacy statement (mandatory)

Already have an account? Log in

Verify your e-mail address now by entering the 6-digit code we’ve just sent to your inbox

Don't receive Code? Resend code

Country * Please Select Afghanistan Albania Algeria Andorra Angola Antigua and Barbuda Argentina Armenia Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin (Dahomey) Bolivia Bosnia and Herzegovina Botswana Brazil Brunei Brunswick and Lüneburg Bulgaria Burkina Faso (Upper Volta) Burundi Cabo Verde Cambodia Cameroon Canada Cayman Islands Central African Republic Central American Federation Chad Chile China Colombia Comoros Congo Free State Costa Rica Cote d’Ivoire (Ivory Coast) Croatia Cuba Cyprus Czechia Democratic Republic of the Congo Denmark Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Eswatini Ethiopia Fiji Finland France Gabon Gambia Georgia Germany Ghana Grand Duchy of Tuscany Greece Grenada Guatemala Guinea Guinea-Bissau Guyana Haiti Holy See Honduras Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Jamaica Japan Jordan Kazakhstan Kenya Kiribati Korea Kosovo Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Mauritania Mauritius Mexico Micronesia Moldova Monaco Mongolia Montenegro Morocco Mozambique Namibia Nassau Nauru Nepal Netherlands New Zealand Nicaragua Niger Nigeria North Macedonia Norway Oman Pakistan Palau Panama Papal States Papua New Guinea Paraguay Peru Philippines Piedmont-Sardinia Poland Portugal Qatar Republic of Congo Republic of Korea (South Korea) Republic of the Congo Romania Russia Rwanda Saint Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines Samoa San Marino Sao Tome and Principe Saudi Arabia Schaumburg-Lippe Senegal Serbia Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Sudan Spain Sri Lanka Sudan Suriname Sweden Switzerland Syria Tajikistan Tanzania Thailand Timor-Leste Togo Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Tuvalu Uganda Ukraine United Arab Emirates United Kingdom Uruguay Uzbekistan Vanuatu Venezuela Vietnam Württemberg Yemen Zambia Zimbabwe Industry * Please Select Automotive, mobilty & transport Financial Services Chemical & agriculture Construction & Real Estate Consulting Education Energy Banking, insurance & FS FMCG Food Gov / Public Industry Health & lifestyle Logistics, Aero & Shipping Media & Entertainment Natural resources & mining Pharma & Biotech Retail & trade Tech & E-Commerce Telco Tourism design Information technology & services Management consulting Retail Pharmaceuticals International trade & development Professional training & coaching luxury goods & jewelry Automotive Insurance Mechanical or industrial engineering Company Size * XS - 1-10 S - 10-100 M - 100-1000 L - 1000-5000 XL - > 5000

Seniority * Please Select Junior Consultant Senior Consultant Manager Senior Manager Director VP SVP Partner CXO Board Member

Areas of interest * Innovation Digital Transformation Culture & Organization IT Strategy & Bus. Alignment Customer Experience

Download Limit Reached

You’ve reached the limit of your current plan’s download allowance.

To continue downloading without interruption, consider upgrading to a higher plan. Our upgraded plans offer:

• Increased download limits
• Access to additional features
• Priority support

Discover the largest library of innovation & transformation tools on the entire Internet!

LOG IN VIA E-MAIL

Forgot password?

New to Digital Leadership? Create your account

Want The Ultimate Guide To Strategic Innovation?

450+ Pages, 50+ Models & 60+ Industry Experts In One Book!

Free book “How to Create Innovation” (digital edition)*

The free book is made available to everybody subscribing on an annual plan (sorry, but we cannot give it away for free!).


You will receive the book in PDF and EPUB formats, ideal for your computer, Kindle, Tablet or other eReading device.

Editable UNITE models (PowerPoint) included

Most of our models and canvases are designed to be applied! 


To help you personalize them to your exact business requirements, you can download fully editable versions of the UNITE models available (PowerPoint format)!

They are straightforward to work with, and you can directly incorporate them into your presentations as you need…thus saving countless hours of replication!

PS: did you know that you are also getting hi-res print-ready versions for your workshops?

Monthly live webinars

Each month we host our exclusive, invitation-only webinar series where one of our industry-leading experts updates our members on the latest news, progress and concepts around business strategy, innovation and digital transformation, as well as other related topics. 



Bi-weekly live group Q&A sessions

These sessions are your opportunity to bring any questions or challenges you’re facing and receive expert guidance on the spot. 


Come and be a part of engaging discussions where your unique concerns are heard and addressed.

1x personal coaching session / month

If you are occasionally looking for a sparring partner or you need limited support, then this option will be ideal for you. Coaching sessions are 1-2 hours where we can discuss any challenge or opportunity you are currently facing.

If you need a few more hours outside of this provision, then these could be billed transparently.

Unlimited video call support! – it’s like always making the right decision!

We believe support shouldn’t be limited. Because we typically find that the occasional hour just doesn’t cut it – particularly if you and your team are in the midst of a large and complex project.

Your time with Stefan is therefore unlimited (fair usage applies) – in his function as coach and sparring partner. That does mean that you will still have to do the work – we cannot take that off you, unless you hire us as consultants. But you will get valuable strategic insight and direction to make sure you are always focusing your efforts where they will lead to the best results.

One personal coaching session / month 
+ unlimited support via e-mail & WhatsApp

We believe support shouldn’t be limited. If you generally know what you are doing but want a sparring partner to frequently raise questions to, this is the perfect choice!

In addition to your monthly 1-1 live coaching sessions with Stefan, you will also get unlimited support from him via email and WhatsApp messaging (fair usage applies). This not only allows you to get valuable strategic direction in your calls, but also gives you instant access to expert help as you work through your plans each month.



The fact that support is text-based means that we can speed up our responses to you while keeping the overall cost of support down.

Welcome gift of our book 
 “How to Create Innovation” 
 (digital + physical editions)*

As a welcome gift, you will receive the both the digital and physical version of our book “How to Create Innovation”, which covers numerous relevant resources and provides additional deep dives into our UNITE models and concepts.


The print version will be shipped out to you on sign-up. The digital version will be emailed to you, and comes in PDF and EPUB formats, ideal for your computer, Kindle, Tablet or other eReading device.

1x major workshop or 2x smaller workshops / month

1x major or 2x smaller workshops based on the UNITE models.

• Topics covered: almost any challenge under the header of #strategy, #innovation or #transformation, leveraging the UNITE models.
• Hands-On Learning: solve your challenges while learning the practical application of the UNITE models and walk away with concrete plans and tools to take your next steps.
• Industry thought leadership: facilitated by Stefan, the founder of Digital Leadership and the main author of the UNITE models, ensuring top-tier guidance and knowledge sharing.
• Collaborative approach: engage in interactive sessions that foster collaboration, idea exchange, and real-time problem-solving among peers and industry leaders.
• Continuous Improvement: Regular workshops ensure ongoing development in your organization staying ahead of industry trends and customer needs.

Access all of our UNITE models, 
 (incl. editable & print versions)

All of our Professional plans offer full access to the following:

• 6x UNITE model package downloads are included per month, if you need something in addition to these however, please let us know!
• Hi-res, print-ready versions you can use in your workshops
• Fully editable PowerPoint versions where applicable – personalize to your needs.
• Exclusive access to our vault of never-before-published strategic materials. We have much more to share – a lot of our concepts have never been published!

Exclusive access to our private UNITE community (upcoming)

We are currently in the process of launching our brand new community., we are designing our community to specifically help you:.

• Get answers to questions (“How do I …”)
• Share leading practices & knowledge
• Jointly develop new models
• Network amongst a highly qualified group of peers

Please, select the reason

Cancelling your plan will deactivate your plan after the current billing period ends. You will not be charged further, but also won’t be able to access [exclusive features/services].

• Cost-related issues
• Unsatisfied with the service
• Features I need are missing
• Switching to a different service
• Other (Please specify)

Book Your Initial Blueprint Session Now

Simply fill out the below form and book in a time for our initial session that works for you. This initial session is free, no strings attached, and is where we can discuss your Blueprint needs more in-depth before moving forward.

Stefan F. Dieffenbacher

Founder of digital leadership.

Adam D. Wisniewski

Partner for it strategy & business alignment.

Get in touch with Digital Leadership

Speak to our team today to find the best solution for your business to grow and scale.

We are here to support you across the entire lifecycle in all topics related to #digital, #innovation, #transformation and #marketing!

Stefan F. Dieffenbacher Founder of Digital Leadership

Contact Us!

Contact form, contact details, book a call.

Title, first name & last name * Email address * Phone number Please let us know how we can best support you! *

By clicking “Send”, I agree to Terms of Service and Privacy Policy.

Let’s have a conversation!

“Please be invited to reach out! We are happy to help and look forward to a first meeting!”

+41 (0) 44 562 42 24

[email protected]

Schedule Your Call With Our Team

Find a time on our calender that best suits you !

Founder and CEO of Digital Leadership

SCHEDULE YOUR INITIAL CALL

A Quick Survey!

Help us better understand the UNITE community

What is the main challenge you're currently facing in your business?

One Last Step..

Seniority  * Please Select Junior Consultant Senior Consultant Manager Senior Manager Director VP SVP Partner CXO Board Member

Areas of interest * Innovation Digital Transformation Culture & Organization IT Strategy & Bus. Alignment Customer Experience

Special Offerings for Corporates & Universities

Please contact us for bulk orders as well as complementary services.

Special book offerings:

• Bundles (digital & physical version)
• Bulk orders
• User onboarding to the UNITE models

Additional services we can provide:

• Workshops and training sessions
• Introduction to the UNITE models in your organization
• Business keynote speech or University lecture

Innovation & transformation consulting

Our book is used in universities globally.

contact form

If you have sone questions to us, let’s have a conversation now!

You Want To Drive Change?

Let’s find the best solution for your business to grow and scale sustainably!

Let’s kick start it!

We will uncover your current business situation and goals and provide you with a bespoke solution that helps you drastically grow your business working with us.

Stefan F. Dieffenbacher, M.B.A.

Feedback about our consulting that we are proud of

Read the reviews and make sure that this is not a waste of time, but a super effective tool.

Digital Leadership

Please be invited to schedule your complimentary strategy call at your convenience! We look forward to a very special conversation!

You want to drive change?

Schedule your free business assessment call with our founder.

On this call, we will uncover your current business situation and goals and talk about how to drive change and solve your need.

Choose the meeting type that applies to your needs and schedule a time to meet with someone from our team. We look forward to speaking with you soon!

Thanks, We’ve Received Your Updated Details

Schedule Your Free Business Assessment

Schedule Your Free Business Assessment Call With Adam D. Wisniewski

Welcome to our scheduling page.

We pointed out that you already have an account. Please, log in to have your purchasing history.

Your Login / Email

If you forgot your password Click here to reset your password

Let’s Design your Customer Experience Blueprint !

In a uniquely designed 60 or 90 minute session* , we will …

• > identify where to start with near-certainty
• > define what approach it takes to create success in your organization

Based on the Blueprinting session, you will receive a tailored blueprint that aligns with your objectives, vision and goals, ensuring that your initiative is a success from start to finish.

In this session, you will be working together with Patrick Zimmermann, Associate Partner for Customer Experience

Let’s Design your Culture & Org-Change Blueprint !

In this session, you will be working together with Dr. Andreas Rein, Partner at Digital Leadership for Culture & Org Change

Let’s Design your Innovation Blueprint !

In this session, you will be working together with Sascha Martini, Partner at Digital Leadership for Innovation and Digital Transformation

Let’s Design your Transformation Blueprint !

In this session, you will be working together with Stefan F. Dieffenbacher, Founder of Digital Leadership Stefan is a global thought leader in the innovation space

Let’s Design your IT Strategy & Business Alignment Blueprint !

In this session, you will be working together with Adam D. Wisniewski, Partner for IT Strategy & Business Alignment

Patrick Zimmermann

Sascha Martini

Dr. Andreas Rein

To download more, please verify your e-mail.

Please, verify your email in order to download the second and all other UNITE models

The verification link has been sent to

Did not receive it? Resend the link

Email has been verified!

Thank you for verification. You could continue downloading any UNITE model. For free Forever.

Continue downloading

Newsletter preferences

Select the topics you want us to update you on! And don’t worry: no matter how many you select, you’ll never get more than 2x emails a week. x

Discover your biggest levers to innovate and grow your business!

Digital Transformation

Travel your company into the digital future by bridging all the silos.

Brand & Experience Design

Create experiences that matter, driven by brand and user insights. launch road-map, together.

Digital Marketing & Sales

Drive online marketing and sales and scale with your best target audience.

Culture & Orgnanisation Change

Don’t let culture and decoupled strategy hold your business back.

Project Management & Execution

Discover proven frameworks to successfully fill the infamous strategy-execution gap.

Write a personalized review! Log in

Create Review

SIGN UP VIA E-MAIL

Error: Contact form not found.

SIGN UP WITH SOCIAL MEDIA

By signing up, I agree to receive news and accept the privacy statement (mandatory)

Sling is now Sling by Toast! Learn more

More Features

• Restaurants
• Get Started

Business Level Strategy: What It Is Plus 3 Examples

• Business Growth & Management , Templates & Guides

If you’re looking for a way to bridge the gap between your more general corporate strategy and your hyper-specific functional strategy, create a business level strategy between the two.

What exactly is business level strategy? And how can you use it to achieve the success you’re looking for? The answer to those questions can be found by examining the three types of business strategy side-by-side.

In This Article, We Talk About:

The complete business strategy

Benefits of business level strategy, 3 examples of business level strategy, tips for building an effective business level strategy, success and the business level strategy.

Think of your business as a car or truck. The engine provides the power. The wheels and tires move the vehicle. But if you tried to connect the two systems directly, the car wouldn’t go. To make it all work, you need a third system.

Business strategy is very similar. Here’s how it all fits together.

1) Organizational level strategy

Business level strategy (or just business strategy for short) is a component of a much larger organizational strategy that provides direction for all your company’s activities.

Going back to the vehicle analogy, organizational strategy is the car or truck as a whole with a driver behind the wheel directing it where to go.

More specifically, these types of strategies specify how your company will allocate resources (e.g., money, labor, inventory, etc.) in order to support the various parts of your business (e.g., infrastructure, production, marketing , etc.).

You can see this illustrated in the image above by the green triangle that surrounds the other three strategies.

The triangle is positioned upside down because the further up the strategies you move, the broader and more all-encompassing the goals become. The further down the strategies you move, the more specific the goals become.

2) Corporate level strategy

Corporate level strategy is like the engine in your car. It provides the power — the drive — to get your business where you want it to go.

Leaving the car analogy for a moment, most corporate level strategy is focused on one of three outcomes:

• Retrenchment

Because there are many ways to reach these general goals, corporate level strategy is, by nature, complex and uncertain, and it’s geared toward the long-term. Unfortunately, that type of strategy doesn’t translate well into specific, actionable items. For that, we need the next stage.

2) Business level strategy

To help you understand business level strategy, let’s pick up the car analogy again.

The engine creates power. But it does so in only one direction. If you were standing by the rear bumper of your car (and you could see through to all the moving parts underneath), you would see a spinning shaft coming out of the engine (we’ll skip the transmission for simplicity’s sake). That shaft would be turning in a clockwise or counterclockwise direction.

But we don’t want to travel left or right, which is where we would go if we hooked the wheels directly to the driveshaft. We want to go forward. For that, we need a differential.

The differential takes the clockwise rotation of the driveshaft and transforms it into forward and backward rotation. That rotation, then, makes the wheels turn in the direction you want.

Business level strategy is like that differential. It translates the drive produced by the corporate level strategy into action (functional level strategy) that moves your business in the right direction.

Business level strategies are more focused than corporate level strategies, but not nearly as focused as functional level strategies. If, for example, your corporate level strategy was to increase market share, your business level strategy might be:

• Broaden exposure
• Increase marketing budget
• Improve quality
• Tap new and emerging markets

Once you’ve established your business level strategy, you’re ready to start moving toward your goals.

3) Functional Level Strategy

Functional level strategy is where the rubber meets the road, so to speak (like the tires in our car analogy). Functional level strategies are the specific actions and benchmarks assigned to departments (and individuals) that move your business toward the goals created by the corporate level strategy.

So if you set one of your business level strategies to improve the quality of your product (in response to the corporate level strategy of increasing market share), then a specific functional level strategy might be for your R&D department to redesign the product to make it cheaper to produce.

That strategy would then be broken down into smaller jobs and assigned to individuals who would do the actual work.

1) Ensure all departments conform to corporate strategies

Business level strategies are put in place to ensure that all departments within your business are working toward the same corporate level strategy. Without this, it’s easy for one department to get off track and begin moving in a different direction than the rest of your organization.

2) Coordinate departments to work together toward a common goal

Success is all about teamwork at every level of your business — between individuals, teams , departments, managers, and owners. Business level strategies are there to coordinate all these disparate elements and get them working toward the same goal.

3) Develop specific capabilities and skills in each department

When you establish your corporate level strategy, you don’t want your marketing department doing the job of your production department. They likely don’t have the skills necessary to do the job right.

Business level strategies provide direction to each department (and by extension, to each individual ). Business level strategies, in large part, determine the specific capabilities and skills that each department will use to achieve its goals.

4) Establish priorities

While direction is a big part of what business level strategies do, it’s not the only part.

Business strategies tell your team which way to move and what to work on, but they also tell them when to perform these activities by establishing priorities for the work.

Your business strategy may tell each department, each team, and each individual what they should do first, second, third (and so on) in order to keep your company as a whole moving in the right direction.

5) Simplify decision making

A strong business strategy can also help simplify the decision-making process. When your team has a direction and a set of priorities for when to tackle the work, the answers to the decisions you have to make may become more obvious.

For example, if your corporate strategy is to grow profits two percent by the end of the year but you’ve already reached market saturation, your choices are limited, and you may need to diversify.

With that decision in mind, you can then set your business strategy accordingly. The result of all that is that your team may have more of a clear and focused direction — find new markets for your product or service — and might not have to make a decision on that variable beforehand.

They can get right to work.

6) Streamline adaptation

Adaptation in business is essential — be it for your company as a whole or for you and your employees individually.

Business level strategies may help streamline adaptation so that everyone involved (and your entire organization) can keep growing and improving.

Think of it this way: If you’re taking a bus to work and the bus breaks down five blocks from your destination, do you give up, turn around, and go home? Of course not. You wait for another bus, hail a cab, or walk the rest of the way.

Your business strategy is the destination. So if problems come up along the way, you’ll know how to adapt — find an alternative solution or even go back to the drawing board — in order to continue moving toward the ultimate goal.

In many ways, a strong business strategy can streamline adaptation by eliminating the many different ways you could go and revealing the options that will move you toward success.

Let’s say you’ve set your corporate level goal to increase market share. These examples of business level strategy tell you how your business is going to achieve that goal.

1) Low cost

In this strategy, your company is trying to beat its competitor’s prices. That translates into:

• Lowering production costs
• Streamlining shipping
• Improving inventory control

Once you know your business level strategy (cut costs), you can start looking at your organization with an eye toward decreasing spending.

2) Differentiation

When you set differentiation as your business level strategy, you’re not concerned with price. Instead, you’re focused on setting your product or service apart from your competitors.

To that end, you may position your company as one with higher standards of quality. That translates to specific goals like improving production and reducing faulty products.

3) Integrated

An integrated business level strategy combines the ideas of low cost and differentiation into one common goal. This strategy allows flexibility in both price and added value.

So, for example, you aim for the middle-of-the-road in terms of price but include an added component (higher quality, novel feature) that justifies the higher price.

1) Make your strategy measurable

When crafting your strategy, be sure that the goal you establish is measurable. For example, your strategy might be to improve a specific service you offer. That’s fine — it’s a good goal to have — but it’s not measurable.

You need to assign some type of quantitative value (a number) to the process that will indicate whether you’ve been successful or not.

Instead of just saying, “We want to improve the renewal rate of our service,” say, “We want to improve the renewal rate of our service by five percent .”

That five percent gives your team something to shoot for and also informs the choices they have to make in order to get there.

2) Be realistic

Being realistic is essential if you want your strategies to be successful. For example, you may set a goal to increase profits from $100,000 to $200,000 over the next fiscal year. But is that really realistic?

If you’re coming out with a whole new line of products and services, it may be. But if you’re just improving slightly on an existing product or service, it’s not likely that your profits will jump that much in a single year.

Instead, it may be better to set a more realistic strategy of increasing profits by 10 or 20 percent (to $110,000 or $120,000).

3) Be specific

Along with making your goals measurable and realistic, craft your strategy to be as specific as possible. So, instead of stating that your company wants to be the best in the business , incorporate measurable and realistic tips into your thinking.

With those details in mind, you can craft a business level strategy that is both specific and achievable. In this case, that might be to hold a 75% market share among all direct competitors .

4) Establish limits

When rolling out new business strategies, momentum is key. If you leave your strategies open-ended, your team may lose the desire and drive to accomplish their goals.

You can attempt to counteract this loss of momentum by attaching a deadline to all the strategies and goals involved.

Doing so may also help provide structure and direction to help your team know what it needs to do first (and second and third). It can also tell them how quickly they’ll need to accomplish certain things in order to stay on track and complete the project before the deadline.

5) Coordinate those involved

The success of all your strategies may depend on how well you coordinate those involved. Depending on the type and size of your business, this may mean individuals, teams, departments, locations, and even other businesses.

Ultimately, you want the various levels of your business working together to fulfill their part of the strategy.

And this doesn’t just apply to the frontline workers. It also applies to new hires , managers, owners, and everyone in-between.

6) Get everyone working toward the same goal

While different individuals, teams, and departments may be working on separate tasks, they should all be working toward the same goal: achieving the business level strategy as a whole.

If some part of your business is pulling in a different direction, it might be much harder to accomplish what you set out to do. A business is very much like a team of horses. If they’re not all pulling in the same direction, very little gets done.

Be sure that everyone knows what they’re supposed to do and how it contributes to the overall goal and betterment of your business.

7) Create a clear separation of responsibilities

One of the keys to a successful business strategy is creating a clear separation of responsibilities.

You need to be sure that everyone knows who is responsible for the unique components of each goal, project, or task. That delineation could come at the individual level, the team level, or the department level.

Without a clear separation, you may find that work gets done twice or by those without the knowledge and skills to do it right.

When you understand business level strategy (and, indeed, all three levels of strategy) you may be able to:

• Structure your goals for maximum impact
• Align your goals from the top of your business to the bottom
• Bridge the gap between the general corporate goals that guide your business and the specific functional strategies that get those goals done.

In addition, incorporating business level strategies can give the managers in your business a better understanding of how their work (and the work of their teams) impacts your organization’s goals.

And when everyone is pulling together in the same direction, it will be much easier for your business to succeed.

Software helps everyone work together

One possible way to get everyone working together to accomplish the business level strategy is by implementing team management software, such as Sling.

The Sling suite of tools provides:

• Comprehensive scheduling for even the most complicated workweek
• Cloud-based schedule distribution and communication
• Built-in time clock for tracking hours and attendance
• A wide range of reports to help you make adjustments for the future
• Paid-time-off control to help you keep expenses low
• Labor cost optimization
• Powerful messaging features
• Your very own newsfeed
• Task lists for you and your employees

When you harness the power of the Sling app, you and your team have the potential to save countless hours each week that you can then dedicate to accomplishing all your business level strategy goals.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com today.

See Here For Last Updated Dates: Link

This content is for informational purposes and is not intended as legal, tax, HR or any other professional advice. Please contact an attorney or other professional for specific advice.

Find the article useful? Share with others:

Related articles

Corporate Level Strategy: What It Is Plus 9 Examples

Success in business is not a random occurrence. It’s the result of planning, p...

Functional Level Strategy: What It Is Plus 18 Examples

Functional level strategy may sound like a difficult concept, but once you under...

What Organizational Strategy Is And Why Your Business Needs It

Organizational strategy isn’t just for big business anymore. Even a startup co...

Get started today

Schedule faster, communicate better, get things done.

How to Write a Case Study Analysis

Step-By-Step Instructions

Lucy Lambriex/Getty Images

• Student Resources
• Business Degree Options
• Choosing A Business School
• Business School Admissions
• MBA Programs & Rankings
• Business Careers and Internships
• Homework Help
• Private School
• College Admissions
• College Life
• Graduate School
• Distance Learning

When writing a business case study analysis , you must first have a good understanding of the case study . Before you begin the steps below, read the business case carefully, taking notes all the while. It may be necessary to read the case several times to get all of the details and fully grasp the issues facing the group, company, or industry.

As you are reading, do your best to identify key issues, key players, and the most pertinent facts. After you are comfortable with the information, use the following step-by-step instructions (geared toward a single-company analysis) to write your report. To write about an industry, just adapt the steps listed here to discuss the segment as a whole.

Step 1: Investigate the Company’s History and Growth

A company’s past can greatly affect the present and future state of the organization. To begin, investigate the company’s founding, critical incidents, structure, and growth. Create a timeline of events, issues, and achievements. This timeline will come in handy for the next step. 

Step 2: Identify Strengths and Weaknesses

Using the information you gathered in step one, continue by examining and making a list of the value creation functions of the company. For example, the company may be weak in product development but strong in marketing. Make a list of problems that have occurred and note the effects they have had on the company. You should also list areas where the company has excelled. Note the effects of these incidents as well.

You're essentially conducting a partial SWOT analysis to get a better understanding of the company's strengths and weaknesses. A SWOT analysis involves documenting things like internal strengths (S) and weaknesses (W) and external opportunities (O) and threats (T). 

Step 3: Examine the External Environment

The third step involves identifying opportunities and threats within the company’s external environment. This is where the second part of the SWOT analysis (the O and the T) comes into play. Special items to note include competition within the industry, bargaining powers, and the threat of substitute products. Some examples of opportunities include expansion into new markets or new technology. Some examples of threats include increasing competition and higher interest rates.

Step 4: Analyze Your Findings

Using the information in steps 2 and 3, create an evaluation for this portion of your case study analysis. Compare the strengths and weaknesses within the company to the external threats and opportunities. Determine if the company is in a strong competitive position, and decide if it can continue at its current pace successfully.

Step 5: Identify Corporate-Level Strategy

To identify a company’s corporate-level strategy, identify and evaluate the company’s mission , goals, and actions toward those goals. Analyze the company’s line of business and its subsidiaries and acquisitions. You also want to debate the pros and cons of the company strategy to determine whether or not a change might benefit the company in the short or long term.​

Step 6: Identify Business-Level Strategy

Thus far, your case study analysis has identified the company’s corporate-level strategy. To perform a complete analysis, you will need to identify the company’s business-level strategy. (Note: If it is a single business, without multiple companies under one umbrella, and not an industry-wide review, the corporate strategy and the business-level strategy are the same.) For this part, you should identify and analyze each company’s competitive strategy, marketing strategy, costs, and general focus.

Step 7: Analyze Implementations

This portion requires that you identify and analyze the structure and control systems that the company is using to implement its business strategies. Evaluate organizational change, levels of hierarchy, employee rewards, conflicts, and other issues that are important to the company you are analyzing.

Step 8: Make Recommendations

The final part of your case study analysis should include your recommendations for the company. Every recommendation you make should be based on and supported by the context of your analysis. Never share hunches or make a baseless recommendation.

You also want to make sure that your suggested solutions are actually realistic. If the solutions cannot be implemented due to some sort of restraint, they are not realistic enough to make the final cut.

Finally, consider some of the alternative solutions that you considered and rejected. Write down the reasons why these solutions were rejected. 

Step 9: Review

Look over your analysis when you have finished writing. Critique your work to make sure every step has been covered. Look for grammatical errors , poor sentence structure, or other things that can be improved. It should be clear, accurate, and professional.

Business Case Study Analysis Tips

Keep these strategic tips in mind:

• Know the case study ​backward and forward before you begin your case study analysis.
• Give yourself enough time to write the case study analysis. You don't want to rush through it.
• Be honest in your evaluations. Don't let personal issues and opinions cloud your judgment.
• Be analytical, not descriptive.
• Proofread your work, and even let a test reader give it a once-over for dropped words or typos that you no longer can see.
• How to Write and Format a Business Case Study
• MBA Case Studies From Top Business Schools
• How to Get Good Grades in Business School
• What Is Proposal Writing?
• What to Expect From MBA Classes
• How to Write a 10-Page Research Paper
• How To Write a Top-Scoring ACT Essay for the Enhanced Writing Test
• How to Write a Functional Behavior Analysis
• How to Write a Descriptive Paragraph
• How to Write a Letter of Recommendation
• How to Write a Business Report for English Learners
• Critical Thinking Definition, Skills, and Examples
• Making a Living from Genealogy
• How to Write a Learning Contract and Realize Your Goals
• How to Write an Abstract
• How To Write an Essay

• Common Leadership Styles
• People Management Skills
• Life Skills to Build
• Managing Time Effectively
• Self-Management Skills
• Skills of Successful Entrepreneurs
• Best Leadership Quotes
• What is a KPI?
• What is OKR?
• What are SMART Goals?
• How to Set Financial Goals
• Best Business Objectives
• Goal Setting Statistics
• Best Goals Quotes
• Boost Cross Team Collaboration
• Leading And Managing Remote Teams
• Apps For Managing Remote Teams
• Virtual Team-building Activities
• Effective Team Meeting Agenda
• Manage a Software Development Team
• Team Communication Quotes
• Teamwork Quotes
• Accountability Quotes
• Powerful Boss Quotes
• Emotional Intelligence Quotes
• Hard Work Quotes
• Perseverance Quotes
• Achievement Quotes
• Positive Attitude Quotes
• Networking Quotes
• Project Management Basics
• Principles of Total Quality Management
• Elements of Total Quality Management
• Key Elements of Strategic Management
• 5 Elements of Management Process

What is Business Level Strategy? Definition, Types, Examples

Tactical and strategic planning is crucial to the success of your business model. Every company needs it to experience real growth across all key areas and to be prepared for different business cycles . Discover and integrate modern business tactics into its corporate strategy.

Incorporating a business-level strategy, the middle layer in the overall strategy hierarchy, enhances the productivity of your company’s department. It leads to market expansion and better use of business resources.

This guide will cover the A-Z of business-level strategy, including how to implement a business-level strategy.

What is a Business Level Strategy?

The primary business level strategy definition is the strategic planning and implementation processes incorporated by successful businesses in their niche market.

Your choice of business-level strategy is configured to gain a competitive advantage, improve customer satisfaction, and maintain above-average returns.

Most organizations that operate one business often combine their business-level strategy with the corporate-level system to devise a single level of the process.

An effective business-level strategy adequately defines a business's goals and policy standpoint to deliver customer value and gain a tremendous competitive advantage over competitors by using the business's core competencies.

Adopting the right business strategy for your business cannot be overemphasized. It determines the company's direction, defines how it serves its customers, and helps the company establish its brand.

A business can have a corporate-level strategy, a business-level strategy, or a functional-level strategy, depending on the business's organizational structure. In an organization having multiple business units, each unit is a strategic business unit ( SBU ).

Creating a business-level strategy is the best way to bridge the gap between your hyper-specific functional strategy and the more general corporate strategy.

The main difference between business and corporate level strategies is that the former is more focused.

Compared to the corporate strategy level, business-level strategists can develop a more detailed and accurate description of their customers than at the corporate strategy level.

Types of Business Level Strategies

There is no best generic strategy for your business. The best business strategy for you depends on two factors: your customers and competitors.

Although you can incorporate different business-level strategies into your business to give it the needed competitive advantage, some of them stand out.

Here are the main business-level strategies available for you to choose from.

1. Cost-Leadership Business Level Strategy

A cost-leadership business strategy allows businesses to increase their overall efficiency by reducing operational costs. It will enable companies to charge lower prices for their products than their competitors.

With consumers being more aware of their choices than ever before and constantly looking to increase their purchasing power, the onus is on you to use an effective price strategy that distinguishes you in the market and can not be turned down.

There are two main cost-leadership business-level strategy types: broad cost leadership and focused cost leadership. What differentiates them is that the broad cost leadership’s competitive scope is broad in target, while that of focused cost leadership is narrow and focused.

Cost leadership strategy is best suited for businesses capable of lowering their operational costs low enough to post profit margins while outpricing their competition. Businesses offering a lower price than their competitors can use this strategy.

2. Differentiation Business Level Strategy

A differentiation strategy provides a product or service with differentiated features compared to competitors.

Differentiation strategy is characterized by innovation. You must conduct extensive market research , identify exploitable gaps in the market, and tailor your business to offer a product or service that bridges that gap or improves an existing product or service.

This business-level strategy is best suited for any business or industry. A wide range of companies uses it to compete for market share as long as they can identify gaps in the market that need to be filled.

3. Focused Differentiation Business Level Strategy

A focused differentiation business strategy targets a specific and narrow segment of customers . It offers them differentiated products with unique features tailored to the target customers.

The former’s focus on a very narrow segment of the market is what separates the focused differentiation business level strategy from the general differentiation strategy.

Focused differentiation is best suited for markets where understanding product comparison is critical. New businesses find competing with companies using a robust differentiation business strategy challenging.

This strategy is effective for businesses that have identified a niche in the market to tailor their products or services. Focusing on a target audience ensures new businesses can get significant demand for their products or services.

4. Focused Low-Cost Business Level Strategy

The focused low-cost business strategy only focuses on a small niche of customers and comes at a lower cost than a strong strategy. It is best to tailor your focus to a particular niche for businesses that do not seem to appeal to the broader market.

By offering the lowest cost provider in your market niche, your business tends to stand out against a wide range of competitors.

A focused low-cost strategy is best suited for businesses with many competitors. Despite the low cost, they are not market strong, or only a small market segment of specific customers can generate the required revenue for your business.

5. Integrated Low Cost/Differentiation Strategy

Businesses employ an integrated low-cost or differentiation strategy with differentiated products offered to customers at a lower cost than competitors.

As a hybrid business strategy, the integrated strategy is quickly gaining ground brought about by increasing global competition.

The benefit that companies that choose this hybrid business level strategy have over those that rely on a single system is that by integrating these two business level strategies, you position yourself better to adapt to quicker environmental changes.

You can use flexible manufacturing systems to maintain superior quality in the product development process while reducing operating expenses.

This hybrid business level strategy is best suited for businesses that operate in a market niche where the buyer's needs and preferences are entirely different from the rest of the current market.

How to Implement a Business-Level Strategy

You need to identify and implement your business objectives in a way that will offer numerous benefits to your business to implement a business-level strategy successfully.

Apart from identifying your goals, you need to have a detailed plan to help your business achieve all of its highlighted goals.

Here is a list of steps to successfully implement a business-level strategy for your business.

1. Identify Target Market and Consumers

The first step in implementing a successful business-level strategy is identifying all relevant target markets and consumers.

Before successfully implementing the needed changes to your business organization, you need to spell out the market you are seeking to penetrate and the ideal business’s customers to which the market will likely open your business.

Consider your competitors that have already experienced significant success in that same market you are about to venture in, their average pricing, the target market, and customers that patronize their products and services.

2. Find Out the Needs of Your Identified Market

Your competitor's sales should closely guide the needs of your customer base. You need to identify your customer's particular needs and then relate them to the products and services you hope to offer.

Consider the price standpoint of your customer and build your product price around the average price a large majority of your customer base can afford.

3. Find Effective Ways of Catering to Your Customer's Needs

Figure out ways to address your highlighted needs. You need to go back to the table with your company executives and build strategies, including where to seek vendors, getting your products to the desired target, and making them within reach of your customers.

Pick a fair price for your product or service that is favorable to the business and your customer base, as you already have established competitors.

4. Compare Your Business Level Strategies with Competitor's Strategies

Considered the business level strategy your competitors employ that still enables them to post massive profit margins.

Most businesses use cost savings as an effective business-level strategy to return large sums of profits and build brand loyalty.

This strategy is of great help if you are looking for how your competitors' business model is geared at improving and adapting to evolving changes in the narrow market segment.

5. Set Common Goals with the Company's Goals

Your goals must be met by all stakeholders of the company and the company as a whole.

Devise a plan for company-wide goals that positions you to consolidate and strengthen your potential within the market. Your business should leverage core competencies to create value that satisfies customers.

Business goals should be specific and should be attainable. You are in constant competition; your goals must be geared towards that solid fact. Successful businesses use the SMART goal framework to set their business and financial goals .

6. Set Unique Goals for your Departments

Individual department goals help the business better segment responsibilities that play a massive role in ensuring the success of the overall company's goals.

Constant communication must be maintained among all quarters of your organization, especially between the corporate level and the employees, to generate the result required and translate into the success of department-assigned tasks.

7. Complete Routine Checks at Each Company Level

Schedule monthly checks that help track your level of progress and ensure you are not diverting from the organization's set goals and objectives.

Your monthly review is done on the corporate level to give room for relevant information to be disseminated down the corporate ladder from department heads to individual department members.

Examples of Business Level Strategies

A breakdown of business-level strategy examples and their application is a good way of understanding how business-level strategy differs from other strategy levels.

The ideal business-level strategy is the one that helps reduce costs and increase return on investment ( ROI ).

Popular business-level strategy examples to aid your understanding include

1. Cost Leadership

An example of business-level strategy businesses employs under cost leadership is offering a product or service at the lowest cost attainable to competitors to gain a considerable market share.

Businesses strive for cost reduction by improving or constructing new and adequate facilities, investing in tools and equipment, and reducing the overhead and administrative expenses of the company.

Cost leaders are companies that are the cheapest manufacturers of a product and providers of a service.

One common misconception about this strategy is that profit margins are lower. You can use rigid cost controls and better facilities for mass-producing products at scale to drive costs and increase your profit margins.

With a focused cost leadership strategy, businesses compete on price with their competitors but focus on a niche market. This strategy helps you better understand your customers’ needs and serve them better.

2. Differentiation

In the case of differentiation, instead of reducing the business operational cost and diverting the money saved to customers, differentiation strategies focus on developing and marketing products to offer customers the most significant value.

There are two forms of differentiation strategy: broad and focused differentiation strategies. What differentiates them is that a broad differentiation strategy focuses on a vast range of customers while a focused differentiation strategy focuses on a smaller number of customers.

The Apple brand, which has created a niche in the smartphone market, is a perfect example. Apple invested heavily in customer service, research and development, and marketing, allowing it to charge a premium price without affecting its market share.

3. Focused Low Cost

Apart from reducing costs from their operations, businesses decide to tailor and divert all their focus and attention to a particular market subset for maximal value as their business-level strategy.

Consider a business that produces and sells manufacturing tools. This business can focus its tool manufacturing strictly on the professional tradesperson market.

4. Focused Differentiation Strategy

This business-level strategy involves a business choosing to differentiate itself from its competitors while focusing a large chunk of its efforts on a smaller subset of its customer market.

The idea behind a focused strategy is that with a smaller target market comes the ability to better understand the business customer base and their needs and successfully deliver the value the customers need.

An example of the focused differentiation strategy is the automobile company Rolls Royce which focuses on offering premium-priced cars for a sub-niche of the global car market.

5. Integrated Low Cost/Differentiation

A hybrid strategy that combines low-cost and differentiation techniques is the most effective approach for several businesses.

The premium fast food restaurant industry is a business venture that utilizes the integrated low-cost/ differentiation strategy to near perfection.

They offer low prices that characterize established food chains and a differentiated range of offerings that take them a step higher than most fast food chains.

Was This Article Helpful?

Anastasia belyh.

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.

• Browse All Articles
• Newsletter Sign-Up

CorporateStrategy →

No results found in working knowledge.

• Were any results found in one of the other content buckets on the left?
• Try removing some search filters.
• Use different search filters.

7 Favorite Business Case Studies to Teach—and Why

Explore more.

• Case Teaching
• Course Materials

FEATURED CASE STUDIES

The Army Crew Team . Emily Michelle David of CEIBS

ATH Technologies . Devin Shanthikumar of Paul Merage School of Business

Fabritek 1992 . Rob Austin of Ivey Business School

Lincoln Electric Co . Karin Schnarr of Wilfrid Laurier University

Pal’s Sudden Service—Scaling an Organizational Model to Drive Growth . Gary Pisano of Harvard Business School

The United States Air Force: ‘Chaos’ in the 99th Reconnaissance Squadron . Francesca Gino of Harvard Business School

Warren E. Buffett, 2015 . Robert F. Bruner of Darden School of Business

To dig into what makes a compelling case study, we asked seven experienced educators who teach with—and many who write—business case studies: “What is your favorite case to teach and why?”

The resulting list of case study favorites ranges in topics from operations management and organizational structure to rebel leaders and whodunnit dramas.

1. The Army Crew Team

Emily Michelle David, Assistant Professor of Management, China Europe International Business School (CEIBS)

“I love teaching  The Army Crew Team  case because it beautifully demonstrates how a team can be so much less than the sum of its parts.

I deliver the case to executives in a nearby state-of-the-art rowing facility that features rowing machines, professional coaches, and shiny red eight-person shells.

After going through the case, they hear testimonies from former members of Chinese national crew teams before carrying their own boat to the river for a test race.

The rich learning environment helps to vividly underscore one of the case’s core messages: competition can be a double-edged sword if not properly managed.

Executives in Emily Michelle David’s organizational behavior class participate in rowing activities at a nearby facility as part of her case delivery.

Despite working for an elite headhunting firm, the executives in my most recent class were surprised to realize how much they’ve allowed their own team-building responsibilities to lapse. In the MBA pre-course, this case often leads to a rich discussion about common traps that newcomers fall into (for example, trying to do too much, too soon), which helps to poise them to both stand out in the MBA as well as prepare them for the lateral team building they will soon engage in.

Finally, I love that the post-script always gets a good laugh and serves as an early lesson that organizational behavior courses will seldom give you foolproof solutions for specific problems but will, instead, arm you with the ability to think through issues more critically.”

2. ATH Technologies

Devin Shanthikumar, Associate Professor of Accounting, Paul Merage School of Business

“As a professor at UC Irvine’s Paul Merage School of Business, and before that at Harvard Business School, I have probably taught over 100 cases. I would like to say that my favorite case is my own,   Compass Box Whisky Company . But as fun as that case is, one case beats it:  ATH Technologies  by Robert Simons and Jennifer Packard.

ATH presents a young entrepreneurial company that is bought by a much larger company. As part of the merger, ATH gets an ‘earn-out’ deal—common among high-tech industries. The company, and the class, must decide what to do to achieve the stretch earn-out goals.

ATH captures a scenario we all want to be in at some point in our careers—being part of a young, exciting, growing organization. And a scenario we all will likely face—having stretch goals that seem almost unreachable.

It forces us, as a class, to really struggle with what to do at each stage.

After we read and discuss the A case, we find out what happens next, and discuss the B case, then the C, then D, and even E. At every stage, we can:

see how our decisions play out,

figure out how to build on our successes, and

address our failures.

The case is exciting, the class discussion is dynamic and energetic, and in the end, we all go home with a memorable ‘ah-ha!’ moment.

I have taught many great cases over my career, but none are quite as fun, memorable, and effective as ATH .”

3. Fabritek 1992

Rob Austin, Professor of Information Systems, Ivey Business School

“This might seem like an odd choice, but my favorite case to teach is an old operations case called  Fabritek 1992 .

The latest version of Fabritek 1992 is dated 2009, but it is my understanding that this is a rewrite of a case that is older (probably much older). There is a Fabritek 1969 in the HBP catalog—same basic case, older dates, and numbers. That 1969 version lists no authors, so I suspect the case goes even further back; the 1969 version is, I’m guessing, a rewrite of an even older version.

There are many things I appreciate about the case. Here are a few:

It operates as a learning opportunity at many levels. At first it looks like a not-very-glamorous production job scheduling case. By the end of the case discussion, though, we’re into (operations) strategy and more. It starts out technical, then explodes into much broader relevance. As I tell participants when I’m teaching HBP's Teaching with Cases seminars —where I often use Fabritek as an example—when people first encounter this case, they almost always underestimate it.

It has great characters—especially Arthur Moreno, who looks like a troublemaker, but who, discussion reveals, might just be the smartest guy in the factory. Alums of the Harvard MBA program have told me that they remember Arthur Moreno many years later.

Almost every word in the case is important. It’s only four and a half pages of text and three pages of exhibits. This economy of words and sparsity of style have always seemed like poetry to me. I should note that this super concise, every-word-matters approach is not the ideal we usually aspire to when we write cases. Often, we include extra or superfluous information because part of our teaching objective is to provide practice in separating what matters from what doesn’t in a case. Fabritek takes a different approach, though, which fits it well.

It has a dramatic structure. It unfolds like a detective story, a sort of whodunnit. Something is wrong. There is a quality problem, and we’re not sure who or what is responsible. One person, Arthur Moreno, looks very guilty (probably too obviously guilty), but as we dig into the situation, there are many more possibilities. We spend in-class time analyzing the data (there’s a bit of math, so it covers that base, too) to determine which hypotheses are best supported by the data. And, realistically, the data doesn’t support any of the hypotheses perfectly, just some of them more than others. Also, there’s a plot twist at the end (I won’t reveal it, but here’s a hint: Arthur Moreno isn’t nearly the biggest problem in the final analysis). I have had students tell me the surprising realization at the end of the discussion gives them ‘goosebumps.’

Finally, through the unexpected plot twist, it imparts what I call a ‘wisdom lesson’ to young managers: not to be too sure of themselves and to regard the experiences of others, especially experts out on the factory floor, with great seriousness.”

4. Lincoln Electric Co.

Karin Schnarr, Assistant Professor of Policy, Wilfrid Laurier University

“As a strategy professor, my favorite case to teach is the classic 1975 Harvard case  Lincoln Electric Co.  by Norman Berg.

I use it to demonstrate to students the theory linkage between strategy and organizational structure, management processes, and leadership behavior.

This case may be an odd choice for a favorite. It occurs decades before my students were born. It is pages longer than we are told students are now willing to read. It is about manufacturing arc welding equipment in Cleveland, Ohio—a hard sell for a Canadian business classroom.

Yet, I have never come across a case that so perfectly illustrates what I want students to learn about how a company can be designed from an organizational perspective to successfully implement its strategy.

And in a time where so much focus continues to be on how to maximize shareholder value, it is refreshing to be able to discuss a publicly-traded company that is successfully pursuing a strategy that provides a fair value to shareholders while distributing value to employees through a large bonus pool, as well as value to customers by continually lowering prices.

However, to make the case resonate with today’s students, I work to make it relevant to the contemporary business environment. I link the case to multimedia clips about Lincoln Electric’s current manufacturing practices, processes, and leadership practices. My students can then see that a model that has been in place for generations is still viable and highly successful, even in our very different competitive situation.”

5. Pal’s Sudden Service—Scaling an Organizational Model to Drive Growth

Gary Pisano, Professor of Business Administration, Harvard Business School

“My favorite case to teach these days is  Pal’s Sudden Service—Scaling an Organizational Model to Drive Growth .

I love teaching this case for three reasons:

1. It demonstrates how a company in a super-tough, highly competitive business can do very well by focusing on creating unique operating capabilities. In theory, Pal’s should have no chance against behemoths like McDonalds or Wendy’s—but it thrives because it has built a unique operating system. It’s a great example of a strategic approach to operations in action.

2. The case shows how a strategic approach to human resource and talent development at all levels really matters. This company competes in an industry not known for engaging its front-line workers. The case shows how engaging these workers can really pay off.

3. Finally, Pal’s is really unusual in its approach to growth. Most companies set growth goals (usually arbitrary ones) and then try to figure out how to ‘backfill’ the human resource and talent management gaps. They trust you can always find someone to do the job. Pal’s tackles the growth problem completely the other way around. They rigorously select and train their future managers. Only when they have a manager ready to take on their own store do they open a new one. They pace their growth off their capacity to develop talent. I find this really fascinating and so do the students I teach this case to.”

6. The United States Air Force: ‘Chaos’ in the 99th Reconnaissance Squadron

Francesca Gino, Professor of Business Administration, Harvard Business School

“My favorite case to teach is  The United States Air Force: ‘Chaos’ in the 99th Reconnaissance Squadron .

The case surprises students because it is about a leader, known in the unit by the nickname Chaos , who inspired his squadron to be innovative and to change in a culture that is all about not rocking the boat, and where there is a deep sense that rules should simply be followed.

For years, I studied ‘rebels,’ people who do not accept the status quo; rather, they approach work with curiosity and produce positive change in their organizations. Chaos is a rebel leader who got the level of cultural change right. Many of the leaders I’ve met over the years complain about the ‘corporate culture,’ or at least point to clear weaknesses of it; but then they throw their hands up in the air and forget about changing what they can.

Chaos is different—he didn’t go after the ‘Air Force’ culture. That would be like boiling the ocean.

Instead, he focused on his unit of control and command: The 99th squadron. He focused on enabling that group to do what it needed to do within the confines of the bigger Air Force culture. In the process, he inspired everyone on his team to be the best they can be at work.

The case leaves the classroom buzzing and inspired to take action.”

7. Warren E. Buffett, 2015

Robert F. Bruner, Professor of Business Administration, Darden School of Business

“I love teaching   Warren E. Buffett, 2015  because it energizes, exercises, and surprises students.

Buffett looms large in the business firmament and therefore attracts anyone who is eager to learn his secrets for successful investing. This generates the kind of energy that helps to break the ice among students and instructors early in a course and to lay the groundwork for good case discussion practices.

Studying Buffett’s approach to investing helps to introduce and exercise important themes that will resonate throughout a course. The case challenges students to define for themselves what it means to create value. The case discussion can easily be tailored for novices or for more advanced students.

Either way, this is not hero worship: The case affords a critical examination of the financial performance of Buffett’s firm, Berkshire Hathaway, and reveals both triumphs and stumbles. Most importantly, students can critique the purported benefits of Buffett’s conglomeration strategy and the sustainability of his investment record as the size of the firm grows very large.

By the end of the class session, students seem surprised with what they have discovered. They buzz over the paradoxes in Buffett’s philosophy and performance record. And they come away with sober respect for Buffett’s acumen and for the challenges of creating value for investors.

Surely, such sobriety is a meta-message for any mastery of finance.”

More Educator Favorites

Emily Michelle David is an assistant professor of management at China Europe International Business School (CEIBS). Her current research focuses on discovering how to make workplaces more welcoming for people of all backgrounds and personality profiles to maximize performance and avoid employee burnout. David’s work has been published in a number of scholarly journals, and she has worked as an in-house researcher at both NASA and the M.D. Anderson Cancer Center.

Devin Shanthikumar  is an associate professor and the accounting area coordinator at UCI Paul Merage School of Business. She teaches undergraduate, MBA, and executive-level courses in managerial accounting. Shanthikumar previously served on the faculty at Harvard Business School, where she taught both financial accounting and managerial accounting for MBAs, and wrote cases that are used in accounting courses across the country.

Robert D. Austin is a professor of information systems at Ivey Business School and an affiliated faculty member at Harvard Medical School. He has published widely, authoring nine books, more than 50 cases and notes, three Harvard online products, and two popular massive open online courses (MOOCs) running on the Coursera platform.

Karin Schnarr is an assistant professor of policy and the director of the Bachelor of Business Administration (BBA) program at the Lazaridis School of Business & Economics at Wilfrid Laurier University in Waterloo, Ontario, Canada where she teaches strategic management at the undergraduate, graduate, and executive levels. Schnarr has published several award-winning and best-selling cases and regularly presents at international conferences on case writing and scholarship.

Gary P. Pisano is the Harry E. Figgie, Jr. Professor of Business Administration and senior associate dean of faculty development at Harvard Business School, where he has been on the faculty since 1988. Pisano is an expert in the fields of technology and operations strategy, the management of innovation, and competitive strategy. His research and consulting experience span a range of industries including aerospace, biotechnology, pharmaceuticals, specialty chemicals, health care, nutrition, computers, software, telecommunications, and semiconductors.

Francesca Gino studies how people can have more productive, creative, and fulfilling lives. She is a professor at Harvard Business School and the author, most recently, of  Rebel Talent: Why It Pays to Break the Rules at Work and in Life . Gino regularly gives keynote speeches, delivers corporate training programs, and serves in advisory roles for firms and not-for-profit organizations across the globe.

Robert F. Bruner is a university professor at the University of Virginia, distinguished professor of business administration, and dean emeritus of the Darden School of Business. He has also held visiting appointments at Harvard and Columbia universities in the United States, at INSEAD in France, and at IESE in Spain. He is the author, co-author, or editor of more than 20 books on finance, management, and teaching. Currently, he teaches and writes in finance and management.

Related Articles

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

The 4 Levels Of Strategy: The Difference & How To Apply Them

Every business leader should be familiar with the different levels of strategy. Like any business, strategy comes in various shapes and sizes. The strategy for a multi-national company will contrast with one from a startup.

Yet, the principles remain. To understand how strategies shift, we'll look at the existing strategy levels and how an organization can apply them.

Ultimately, the biggest takeaway we hope you get from this article is that strategy is for everyone .

You don't have to wait until your business grows to a certain size to “get strategic.” Instead, be conscious of where you are as a business so you can develop your strategy in a way that fits and grows with your organization.

We'll discuss how the strategy levels in an organization differ and provide some context on how to use these different levels of strategy in strategic management .

We’ll also show you how you can centralize your strategy in Cascade and ensure the alignment between the different levels for successful and effective strategy execution!

The Levels Of Strategy

Strategists often refer to three levels of strategy: corporate level strategy, business level strategy, and functional level strategy.

But, they are missing a fundamental level that is key for successful strategy execution: operational level strategy .

We’ll explain the differences and how to apply all four of them in your organization. We also have separate articles on all 4 levels if you're only interested in learning about a certain level.

Corporate Level Strategy

Business level strategy, functional level strategy, operational level strategy.

No matter the level of strategy, "organizations that promote a transparency and collective culture when it comes to strategy, generate a stronger commitment and sense of accountability from their employees." This statement by Guillermo Hermosillo Cue, Global Innovation Director at Burger King in our state of strategy report echoes the importance of strategic communication regardless of the strategy level.

The corporate level strategy is the highest level strategy in an organization.

The corporate strategy defines the organization’s overall direction and the high-level ideas of how to move towards it. These plans are usually created by leadership, such as the CEO and top management.

Generally, this is the group involved because they have a deep understanding of the company and the strategic business knowledge needed to steer the organization in the right direction.

A corporate strategy is generally broader than the other strategy levels. Strategies at this level are more conceptual and futuristic than the other level strategies. They usually span a 3-5 year period.

A corporate strategic plan generally encompasses:

• The core business metrics
• The strategic focus areas
• The corporate goals
• The strategic objectives
• The most important KPIs

⚠️ Important! The corporate level strategy needs to take into account the foundational elements of the organization: its vision statement , mission statement, and company values .

Why create a corporate strategy?

In the corporate strategic plan, you're essentially mapping out where your organization should play.

This master plan sets the stage for developing business-unit-level and functional-level strategies, along with nitty-gritty operational plans.

These strategies, in turn, will guide the downstream decisions made by employees of all levels. Therefore, every decision made in the organization should directly or indirectly contribute to the strategy's corporate objectives.

Every organization needs a corporate strategy. There is no such thing as a too-small organization nor a too-large one to define what they want to achieve and how they will do it.

👉🏻 Grab your free corporate strategy template to follow a structured approach and create your corporate strategic plan.

The business level strategy is the second tier in the strategy hierarchy.

Sitting under the corporate strategy, the business strategy is a means to achieve the goals of the specific business units in the organization.

The initiatives and objectives within each business unit’s strategy will be focused on gaining a competitive advantage in the particular market in which the business unit operates.

There are different types of business level strategies organizations adopt depending on the competitive advantage they want to gain. Organizations face crucial decisions here, with options like adopting a differentiation strategy or embracing a cost leadership approach.

📚 Learn more about the different types of business strategies in our article: What Is A Business Level Strategy? How To Create It + Examples

Each business area must make a strategic decision and define the approach they’ll choose to get closer to their goals.

One thing to note, implementing this strategy level is only useful for organizations with multiple business units. An organization with multiple business units may sell products and services or may sell multiple product lines and services in different industries.

A business level strategy examples

A large bank is a prime example of an organization selling multiple services in different industries.

To name a few, it has business units like retail banking, investment management, and insurance company . Each of these business units would have distinct goals and a distinct business unit strategy to achieve these goals.

📚 Read more: The 7 Best Business Strategy Examples I've Ever Seen

Include middle managers at the business level strategy

Strategies at the business level should be constructed by VPs and —global or regional— business unit heads. However, also including other middle managers within each unit is a best practice.

Including a range of managers from each unit to participate in the strategy process has two main benefits:

• It increases buy-in: Managers who've had a chance to contribute to the strategy formulation feel included in the decision-making. Therefore, they’re more likely to accept the strategy and jump on board with its execution.
• It improves ownership: Employees who are given the opportunity to contribute to the strategy development are more likely to take ownership of its completion.

💡 Pro Tip : If your organization only has one business unit, you don't need to worry about this strategy level—and can skip to the functional strategy level.

👉🏻 Grab your free business strategy template to follow a structured approach and create your business strategic plan.

This level of strategy designs the approach for the different functional areas or departments —we’ve already given you a little spoiler with the previous image of the bank strategy levels example. These functions can include the marketing department, finance, supply chain, manufacturing, human resources, and more.

The primary objective of functional strategy is to align the activities and efforts of these individual departments with the broader goals and objectives set at higher strategic levels, such as business and corporate strategy.

Functional strategy deals with a fairly narrow focus. They are designed to address the unique challenges and opportunities within each functional area.

Your marketing strategy, finance, IT, and other departments all have goals and responsibilities to deliver. Having a visible functional level of strategy that aligns back to the overall corporate strategy will increase the chances of success.

These strategies involve resource allocation , measurable goals, and a focus on continuous improvement, all within the context of individual functions.

The secret to a successful functional level strategy

Now, having each department equipped with a well-defined functional strategy is an excellent beginning. But beware of the pitfalls of isolating each functional area in its own strategy bubble; that's venturing into siloed territory.

There are two pivotal aspects to keep in mind for a successful functional strategy:

• Cross-functional collaboration : The magic happens when different departments join forces. When you foster collaboration between these functions, you open the door to innovation and synergy.
• Strategic alignment : Ensuring that the strategy of each functional area seamlessly matches the overarching organizational goals is the foundation of success.

In Cascade , you can create strategic plans for each function in your organization, which link back to the main corporate plan to ensure everything is moving in the right direction.

"A journey of a thousand miles begins with one step,” as the saying goes.

Check out our strategic planning templates for different functions:

• Marketing Strategy Template
• HR Strategy Template
• Finance Strategy Template
• Supply Chain Strategy Template

📚 Explore thousands of other free strategy templates in our Template Library !

Operational level strategy, situated at the lowest tier of the strategic hierarchy, focuses on the day-to-day actions and tactics needed to run the business, manage processes, and implement change effectively. It’s the “boots-on-the-ground” aspect of strategy, ensuring that plans are translated into tangible actions and results.

In simple terms, this is the strategy that will inform the day-to-day work of employees and will ultimately keep your organization moving in the right direction.

It's primarily concerned with short-term objectives and the practical execution of plans, detailing the specific actions, procedures, and activities that need to be executed to meet organizational goals.

The operational level strategy involves roles like PMOs , team leaders, individual contributors, and team members, and plays a pivotal role in the successful implementation of broader strategies.

It’s probably the most important level of strategy because, without it, your organization can quickly lose traction and “get stuck” while the competition moves forward.

Cascade Strategy Execution Platform improves operational efficiency by eliminating duplication and aligning teams toward common goals. It helps reduce waste caused by misalignment, promoting streamlined operations and optimal performance.

Key characteristics of operational level strategy

• Tactical Execution : Operational strategies focus on executing tactical steps to achieve business objectives, offering a detailed roadmap for execution.
• Short-Term Focus : Geared towards short-term goals and might encompass quarterly, monthly, or even daily activities.
• Resource Utilization : Deals with resource allocation at a detailed level, including workforce management, budget allocation, and technology deployment for specific projects and initiatives .
• Project Management : Operational strategies often include project management to coordinate teams and meet time and budget constraints.
• Feedback and Adaptation : They incorporate feedback loops, allowing adjustments as circumstances change.
• Immediate Impact : Success at the operational level directly contributes to achieving broader business and corporate goals, serving as a linchpin in strategy execution.

The Four Levels Of Strategy Are The First Step

Of course, having a good (or great) strategy isn’t guaranteed success.

But it's definitely the place to start. Understanding the levels of strategy is a big part of getting the creation right. However, with increased levels, there can be increased confusion.

Our dedicated strategy execution platform , Cascade , allows you to centralize your strategy into one central hub. It empowers you to build your strategic plans and visualize how they work together. Easily see how your corporate strategy breaks down into business, functional, and operational plans, all in one cohesive platform.

Cascade simplifies the alignment of projects and encourages collaboration across plans and departments, making strategic execution a breeze.

Sign up to Cascade for FREE or book a demo with one of our strategy experts to learn how you can go from simply writing your plan somewhere static to a more dynamic space that you can share with everyone in your organization—it makes all the difference!

Popular articles

Viva Goals Vs. Cascade: Goal Management Vs. Strategy Execution

What Is A Maturity Model? Overview, Examples + Free Assessment

How To Implement The Balanced Scorecard Framework (With Examples)

The Best Management Reporting Software For Strategy Officers (2024 Guide)

Your toolkit for strategy success.

Top 40 Most Popular Case Studies of 2021

Two cases about Hertz claimed top spots in 2021's Top 40 Most Popular Case Studies

Two cases on the uses of debt and equity at Hertz claimed top spots in the CRDT’s (Case Research and Development Team) 2021 top 40 review of cases.

Hertz (A) took the top spot. The case details the financial structure of the rental car company through the end of 2019. Hertz (B), which ranked third in CRDT’s list, describes the company’s struggles during the early part of the COVID pandemic and its eventual need to enter Chapter 11 bankruptcy. 

The success of the Hertz cases was unprecedented for the top 40 list. Usually, cases take a number of years to gain popularity, but the Hertz cases claimed top spots in their first year of release. Hertz (A) also became the first ‘cooked’ case to top the annual review, as all of the other winners had been web-based ‘raw’ cases.

Besides introducing students to the complicated financing required to maintain an enormous fleet of cars, the Hertz cases also expanded the diversity of case protagonists. Kathyrn Marinello was the CEO of Hertz during this period and the CFO, Jamere Jackson is black.

Sandwiched between the two Hertz cases, Coffee 2016, a perennial best seller, finished second. “Glory, Glory, Man United!” a case about an English football team’s IPO made a surprise move to number four.  Cases on search fund boards, the future of malls,  Norway’s Sovereign Wealth fund, Prodigy Finance, the Mayo Clinic, and Cadbury rounded out the top ten.

Other year-end data for 2021 showed:

• Online “raw” case usage remained steady as compared to 2020 with over 35K users from 170 countries and all 50 U.S. states interacting with 196 cases.
• Fifty four percent of raw case users came from outside the U.S..
• The Yale School of Management (SOM) case study directory pages received over 160K page views from 177 countries with approximately a third originating in India followed by the U.S. and the Philippines.
• Twenty-six of the cases in the list are raw cases.
• A third of the cases feature a woman protagonist.
• Orders for Yale SOM case studies increased by almost 50% compared to 2020.
• The top 40 cases were supervised by 19 different Yale SOM faculty members, several supervising multiple cases.

CRDT compiled the Top 40 list by combining data from its case store, Google Analytics, and other measures of interest and adoption.

All of this year’s Top 40 cases are available for purchase from the Yale Management Media store .

And the Top 40 cases studies of 2021 are:

1.   Hertz Global Holdings (A): Uses of Debt and Equity

2.   Coffee 2016

3.   Hertz Global Holdings (B): Uses of Debt and Equity 2020

4.   Glory, Glory Man United!

5.   Search Fund Company Boards: How CEOs Can Build Boards to Help Them Thrive

6.   The Future of Malls: Was Decline Inevitable?

7.   Strategy for Norway's Pension Fund Global

8.   Prodigy Finance

9.   Design at Mayo

10. Cadbury

11. City Hospital Emergency Room

13. Volkswagen

14. Marina Bay Sands

15. Shake Shack IPO

16. Mastercard

17. Netflix

18. Ant Financial

19. AXA: Creating the New CR Metrics

20. IBM Corporate Service Corps

21. Business Leadership in South Africa's 1994 Reforms

22. Alternative Meat Industry

23. Children's Premier

24. Khalil Tawil and Umi (A)

25. Palm Oil 2016

26. Teach For All: Designing a Global Network

27. What's Next? Search Fund Entrepreneurs Reflect on Life After Exit

28. Searching for a Search Fund Structure: A Student Takes a Tour of Various Options

30. Project Sammaan

31. Commonfund ESG

32. Polaroid

33. Connecticut Green Bank 2018: After the Raid

34. FieldFresh Foods

35. The Alibaba Group

36. 360 State Street: Real Options

37. Herman Miller

38. AgBiome

39. Nathan Cummings Foundation

40. Toyota 2010

MBA Knowledge Base

Business • Management • Technology

Home » Management Case Studies » Case Study on Apple’s Business Strategies

Case Study on Apple’s Business Strategies

Apple was founded by Steve Jobs and Stephen Wozniak in 1976;  Apple Computers  revolutionized the personal computer industry.   Apple Computers Inc is considered to be one of the innovators in the computer industry . It brought about different changes to the industry; these changes are still visible in the present.   The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. It also serves as a meter of how products are designed. The company offers various products for the different market it targets. The products made by the company offer something different.

We can describe Apple’s business strategy in terms of product differentiation and strategic alliances.

Product Differentiation

Apple prides itself on its innovation.   When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. It released a highly stable operating system in 1999, and updates following 1999. Apple had one of its critical points in history in 1999 when it introduced the iBook.   This completed their “product matrix”, a simplified product mix strategy formulated by Jobs.   This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments.   The matrix is as follows:

In 2001, Apple hit another important historical point by launching iTunes.   This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. Then Apple introduced the iPod , central to the “digital lifestyle” strategy.   Philip W. Schiller, VP of Worldwide Product Marketing for Apple, stated, “iPod is going to change the way people listen to music.” He was right.

Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. In 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. In reference to Apple’s recent advancements, Jobs said, “We are going to do for digital creation what Microsoft did for the office suite productivity.” That is indeed a bold statement.   Time will tell whether that happens.

Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining cooperation from “The Big 5” Music companies–BMG, EMI, Sony Entertainment, Universal, Warner.   This allowed iTunes Music Store online to offer over 200,000 songs at introduction. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors.

Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation.   Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances.

There is economic value in product differentiation, especially in the case of monopolistic competition.   The primary economic value of product differentiation comes from reducing environmental threats.   The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants.   Not only does a company have to bear the cost of standard business, it also must bear the costs associated with overcoming the differentiation inherent in the incumbent.   Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors.

A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes.   If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers.   Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers.   With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy.

A company attempts to make its strategy a sustained competitive advantage .   For this to occur, a product differentiation strategy that is economically valuable must also be rare, difficult to imitate, and the company must have the organization to exploit this.   If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare.   If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate.

There are four primary organizing dilemmas when considering product differentiation as a strategy.   They are as depicted below.

Five leadership roles will facilitate the innovation process:   Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor.   The institutional leader creates the organizational infrastructure necessary for innovation.   This role also resolves disputes, particularly among the other leaders.   The critic challenges investments, goals, and progress.   The entrepreneur manages the innovative unit(s).   The sponsor procures, advocates, and champions.   The mentor coaches, counsels, and advises.

Apple had issues within its organization.   In 1997, when Apple was seeking a CEO acceptable to Steve Jobs , Jean-Louis Gassee (then-CEO of Be, ex-Products President at Apple) commented, “Right now the job is so difficult, it would require a bisexual, blond Japanese who is 25 years old and has 15 years’ experience!”  Charles Haggerty, then-CEO of Western Digital, said, “Apple is a company that still has opportunity written all over it.   But you’d need to recruit God to get it done.”   Michael Murphy, then-editor of California Technology Stock Letter, stated, “Apple desperately needs a great day-to-day manager, visionary, leader and politician.   The only person who’s qualified to run this company was crucified 2,000 years ago.”

Since Jobs took over as CEO in 1997, Apple seems to have resolved the innovation dilemmas, evidenced by their numerous innovations.   To continue a product differentiation strategy, Apple must continue its appropriate management of innovation dilemmas and maintain the five leadership roles that facilitate the innovation process.

Strategic Alliances

Apple has a history of shunning strategic alliances.   On June 25, 1985, Bill Gates sent a memo to John Sculley (then-CEO of Apple) and Jean-Louis Gassee (then-Products President).   Gates recommended that Apple license Macintosh technology to 3-5 significant manufacturers, listing companies and contacts such as AT&T, DEC, Texas Instruments, Hewlett-Packard , Xerox , and Motorola. (Linzmayer, 245-8)   After not receiving a response, Gates wrote another memo on July 29, naming three other companies and stating, “I want to help in any way I can with the licensing.   Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer.   He felt that up-and-coming rival Sun Microsystems would overtake Apollo Computer, which did happen.

Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip.   Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business.   That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings.           Apple turned the corner in 1993.   Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995.   However, Spindler nixed Gateway in 1995 due to cannibalization fears. Gil Amelio, an avid supporter of licensing, took over as CEO in 1996.   Under Amelio, Apple licensed to Motorola and IBM. In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power.

Jobs despised licensing, calling cloners “leeches”.   He pulled the plug, essentially killing its largest licensee (Power Computing).   Apple subsequently acquired Power Computing’s customer database, Mac OS license, and key employees for $100 million of Apple stock and $10 million to cover debt and closing costs.   The business was worth $400 million.

A massive reversal occurred in 1997 and 1998.   In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system.   To realize our ambitious plans we must focus all of our efforts in one direction.” This statement was in the wake of Apple divesting significant software holdings (Claris/FileMaker and Newton).

There is economic value in strategic alliances.     In the case of Apple, there was the opportunity to manage risk and share costs  facilitate tacit collusion , and manage uncertainty.   It would have been applicable to the industries in which Apple operated.   Tacit collusion is a valid source of economic value in network industries, which the computer industry is.   Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry.   Although Apple eventually realized the economic value of strategic alliances, it should have occurred earlier.

The following are some comments about Apple’s no-licensing policy.

“If Apple had licensed the Mac OS when it first came out, Window   wouldn’t exist today.” – Jon van Bronkhorst, “The computer was never the problem.   The company’s strategy was.   Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system.   We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price.   That was a mistake.   What we should have done was calculate an appropriate price to license the operating system.   We were also naïve to think that the best technology would prevail.   It often doesn’t.” – Steve Wozniak, Apple cofounder

“If we had licensed earlier, we would be the Microsoft of today.” – Ian W. Diery, Apple Executive VP, I am aware that I am known as the Great Satan on licensing…I was never for or against licensing.   I just did not see how it would make sense.   But my approach was stupid.   We were just fat cats living off a business that had no competition.” –   Jean-Louis Gassee, Be CEO and ex-CEO of Apple, admitting he made a strategic mistake.

A strategic alliance can be a sustained competitive advantage if it is rare, difficult to imitate, and the company has an organization to exploit it.   If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare.   If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. When organizing for strategic alliances, a firm must consider whether the alliance is non-equity or equity.   A non-equity alliance should have explicit contracts and legal sanctions. An equity alliance should have contracts describing the equity investment.   There are some substitutes for an equity alliance, such as internal development and acquisitions.   However, the difficulties with these drive the formation of strategic alliances.   It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”

Related Posts:

• Case Study: iTunes Strategic Innovation
• Case Study: Critical Success Factors of Dell
• Case Study: “Dude, You're Getting a Dell” Ad Campaign by Dell
• Case Study: "Intel Inside" Campaign by Intel
• Case Study of Apple Inc: An Apple for Your Enterprise
• Case Study: Apple iPod Silhouette Ad Campaign
• Case Study: How Netflix Took Down Blockbuster
• Case Study: Management Information System at Dell
• Case Study: The Business Strategy of Apple
• Case Study: The Microsoft Antitrust Case

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

• Study Guides
• Homework Questions

BSAD2540CH6Case

About Cambridge Judge

• Overview of the Business School
• History and today
• External recognition
• Diversity and inclusion
• Virtual tours
• Jobs at Cambridge Judge
• Giving overview
• Fundraising priorities
• How to give
• Impact and recognition
• Opportunities for your organisation overview
• Recruit from Cambridge Judge
• Develop your talent
• Corporate speaker opportunities
• Student consultancy projects
• Special interest groups and societies
• News overview
• Announcements
• Programme news
• Student and alumni news
• Faculty news
• Research centre news
• Fundraising news
• Media coverage
• News room (for journalists)

FT Responsible Business Education Awards: 2 wins for Cambridge Judge

Purpose of Finance course wins top Teaching award and a study on paedophile hunters wins Academic Research award, while Cambridge Judge is Highly Commended for School-wide activities in the Financial Times awards for business education responsibility and impact.

Degree programmes

• Masters degrees overview
• Executive MBA
• Executive Master of Accounting
• Master of Finance (MFin)
• MSt in Entrepreneurship
• MSt in Social Innovation
• MPhil in Management
• MPhil in Technology Policy
• PhD and research masters overview
• PhD pathways
• Business Doctorate
• Master of Research in Management
• MPhil in Finance
• MPhil in Innovation, Strategy and Organisation
• MPhil in Strategy, Marketing and Operations
• Management Studies (Tripos)
• Virtual tours of the Business School
• Cambridge life
• Entrepreneurship at Cambridge Judge
• Financial aid
• Admission events

Non-degree programmes

• Entrepreneurship programmes overview
• Accelerate Cambridge
• Enterprise Tuesday
• Venture Creation
• Strategic Business Growth
• EnterpriseTECH
• EnterpriseWOMEN
• Social Venture Weekend
• First Certificate in Business overview
• For learners
• For organisations
• Executive Education overview
• Online ExecEd programmes
• Open programmes for individuals
• Custom programmes for organisations

Need help funding your degree programme studies at Cambridge Judge?

Explore our scholarship and loan opportunities.

Executive Education

• Open programmes for individuals overview
• Programme finder
• New programmes
• Online programmes
• Managing People
• Managing Organisations
• Environmental, Social and Governance (ESG)
• Strategy and Growth
• Innovation and Technology
• Professional Service Firms
• Custom programmes for organisations overview
• Open programmes for organisations
• Clients and case studies
• Psychometric services
• Professional service firms
• Certificate of Achievement
• Digital certificates
• Visa information
• Meet the team

Not sure which programme is for you?

Search our portfolio of over 40 well-crafted programmes that will expand your skills and understanding in service of your organisational, personal development and career objectives.

• Research and teaching staff
• Honorary appointments
• Subject groups overview
• Economics and Policy
• Operations and Technology Management
• Organisational Behaviour
• Organisational Theory and Information Systems
• Strategy and International Business
• Research centre finder
• Alternative Finance
• Behavioural Economics and Policy
• Business Research
• Chinese Management
• Circular Economy
• Digital Innovation
• Endowment Asset Management
• Energy Policy Research Group
• Entrepreneurship
• Experimental & Behavioural Economics Group
• Finance, Technology and Regulation
• Financial Reporting and Accountability
• Health Leadership and Enterprise
• India and Global Business
• International Human Resource Management
• Process Excellence and Innovation
• Psychometrics
• Regulatory Genome Project
• Risk Studies
• Social Innovation
• Wo+Men’s Leadership
• Impact and practitioner engagement overview
• Collaborate with our faculty
• Publications overview
• The Cadbury Archive
• Information and Library Services overview
• Research seminars

Faculty and research

• AI and technology
• Behavioural economics
• Career and personal development

Entrepreneurship and innovation

• ESG and sustainability
• Equality, diversity and inclusion
• Finance and accounting
• Future of work
• Global strategy and international business
• Governance, economics, and policy
• Leadership and organisational behaviour
• Operations management
• Philanthropy
• Social impact

International Women's Day event: 8 March

See how Cambridge Judge is developing the next generation of women leaders.

Find an expert

We have faculty, who can speak on many current UK and global issues, and are happy to be contacted by journalists.

• All insights
• Alumni council
• Regional Alumni groups
• Alumni Special Interest Groups (ASIGs)
• Alumni toolkit
• Alumni profiles
• Get involved
• CJBS network
• CJBS Connects: Worldwide

Join us in achieving real world impact

We invite you to invest in our future and help us to remain at the forefront of global business research and education.

Redefining disr…

Redefining disruptive innovation: challenging decades of management strategy

The article at a glance.

Disruptive innovation theory has been pivotal to management strategy for 3 decades, but Professor Shahzad (Shaz) Ansari of Cambridge Judge Business School outlines a new way of thinking.

Category: Entrepreneurship and innovation Insight

Disruptive innovation theory (DIT) has been central to the thinking about how organisations operate in a competitive economy for nearly 30 years.

Yet despite many academic papers on DIT and its considerable effect on business thinking – including how newcomers challenge established markets and how incumbents react – there has also been a lot of controversy over DIT’s applicability and how it has evolved since the watershed 1995 book “Disruptive Technologies: Catching the Wave”, by prominent academics Clayton Christensen and Joseph Bower.

The debates and controversies surrounding DIT is the topic of extensive research by Shaz Ansari, Professor of Strategy & Innovation at Cambridge Judge Business School, along with colleagues at the Institute for Manufacturing (IfM) at the University of Cambridge: IfM Doctoral Student Stephen Lile, who is an Executive MBA graduate of Cambridge Judge (EMBA 2016) and current Fellow at the School’s Strategy and International Business subject group, and Dr Florian Urmetzer, Associate Teaching Professor at the IfM.

How the research aims to help firms respond to market disturbances

Their research (“Rethinking disruptive innovation: unravelling theoretical controversies and charting new research frontiers”) has dissected the application of DIT and academic papers on the topic, including some co-authored by Shaz over the past 15 years, to develop a new approach to looking at DIT.

Our research will help […] provide businesses with a more flexible guide to market disruptions and a better understanding of the factors at play.

“It became clear that the discussion around DIT was focused too narrowly and that a broader and more nuanced approach was needed,” says Shaz. “We think our research will help to focus thinking on DIT in a way that will help provide businesses with a more flexible guide to market disruptions and a better understanding of the factors at play.

“Our research on DIT is also a terrific example of cross-departmental collaboration at the University of Cambridge, in this case between Cambridge Judge Business School and the Institute of Manufacturing, and the topic of disruptive innovation is one that I frequently teach in EMBA and Executive Education programmes at Cambridge Judge.

Why it’s important to challenge assumptions about disruptive innovation theory

The research by Shaz and his IfM colleagues has developed a novel ‘challenger-incumbent’ perspective that shifts the focus beyond the traditional battle between dominant players and disruptors to instead consider a broader DIT ecosystem that also encompasses many other stakeholders and subtler ways in which innovation causes disruption.

In so doing, the research sheds new light on issues such as outcome bias in DIT, which tends to emphasise the benefits of disruption while glorifying challengers, arguing that such preconceptions can distort broader issues surrounding innovation and disruption.

“Our work in this area was designed not only to synthesise other research on the topic, as valuable as such synthesis can be, but also to revise some of the thinking around DIT to the point of challenging some well-established assumptions about one of the most pivotal business theories in the past quarter-century,” says Shaz.

“We don’t pretend to be the last word on this topic, and we strongly invite further research to better understand the use, limitations and subtle nature of disruptive innovation theory.”

Successful business strategies for dealing with disruption

Previous research by Shaz had found that incumbents can survive and even prosper when faced by disruptive innovation by forging effective partnerships with challenger firms, adapting their structure, acquiring promising challengers, or having complementary assets important for the new technology’s effective deployment and commercialisation.

In a study about the auto industry, done with co-authors Eden Yin, Associate Professor in Marketing at Cambridge Judge, and a senior executive of Jaguar Land Rover (JLR), Shaz identified 8 key issues facing incumbents in such a sector faced with multiple disruptive changes:

• how to disrupt themselves when faced with challenges
• coping with multiple radical innovations and challengers
• cooperating with competitors new and old
• identifying key factors to navigate change; better predicting and preparing for the most likely future scenario
• organisational capability
• developing a platform strategy (car as a platform)
• obtaining a different set of organisational competences or radically transforming existing ones

A study Shaz co-authored on digital video recorder (DVR) company TiVo demonstrated how TiVo was initially seen as a disruptive threat to the incumbent television industry, but the firm then effectively navigated and reframed itself as a ‘connector’ instead of a ‘disruptor’ to win the support over time of the TV ecosystem – to TiVo’s advantage.

This study looked at the ‘disruptor’s dilemma’ in which the challenger needs to consider how it can pitch its innovation to attract new customers while reducing the threat felt by the broader ecosystem that it might ultimately benefit from, and also how the innovation might be modified to fit into the existing ecosystem.

Six controversies about disruptive innovation theory

Regarding disruptive innovation theory, Shaz’s research identifies 6 key controversies surrounding DIT that deserve further academic research in order to address some of the challenges surrounding the theory to build a better understand DIT:

Definitions

Scholars have differed on precisely what disruptive innovation means (and in fact Clayton Christensen later questioned his decision to prefix ‘innovation’ with ‘disruptive’). Is DIT an innovation or a way to measure success in meeting organisational goals? And is DIT only ‘disruptive’ in the sense of a short and sharp shock that upends existing arrangements, or does it also need to be sustaining and transformational?

“A similar lack of clear definition has affected scientific scholarship regarding the term ‘sustainability’”, says Shaz, “and this has carried over into how governments and companies implement such initiatives given that there is no single accepted definition of the word.”

Case studies

Critics of DIT believe that the initial work on the theory was too reliant on historical case studies, which can pose a challenge for developing theories that are generalisable. While initial DIT theory suggested that new challengers usually topple incumbents, more recent research contests such an assertion – finding that many market leaders may wobble but don’t fall in the face of disruptive competition, and then recover to a prominent position. For example, generative AI may even favour incumbents as they can bundle AI into their large installed customer bases. Thus, rather than being toppled by challengers, incumbents may even be able to even extend their dominance.

“This is an area full of ambiguities,” says Shaz. “Newcomers can gain a foothold in a market that weakens an incumbent’s market dominance, but that doesn’t mean that the incumbent disappears or fails to remain a potent force in that market.”

Generalisability

If the case studies anchoring a theory are too narrow, that theory may not apply properly to other types of cases, so this has prompted critiques of DIT.

For example, how does Apple’s hugely successful introduction of the iPhone fit the theory of DIT? Disruptive innovation usually is seen as involving a cheaper and initially inferior technology finding a foothold in an under-served market, but the iPhone was more expensive and superior to existing products. In this case, a premium product made people’s lives easier and proved to be a big hit, disrupting dominant incumbents like Nokia and Blackberry, and prompting rivals to develop similar smartphones.

“DIT is not alone in attracting challenges regarding generalisability, as well-established research in behavioural economics and other fields have also been questioned in the same way,” says Shaz.

Unit of measure

Establishing what should be the unit of measure regarding DIT is another area that has divided opinion – as even Clayton Christensen’s work has appeared to shift between different units of measure including the market, the company, and the business model.

The research by Shaz suggests that the difficulty in establishing a clear unit of measurement reflects the evolutionary nature of DIT and how it intersects with other debates among scholars in this area – which is why it’s important to have an integrated approach in analysing this area.

Outcome bias

Theories can be skewed if scholars evaluate them based on outcomes rather than core rationale – and in the case of DIT this can take the form of ‘incumbent survivor bias’ (which over-emphasises cases where incumbents fall to disruptors) and ‘pro-innovation bias’ (which assumes that new and more innovative is better).

DIT research has often focused on how incumbents can dodge or parry innovative challengers, usually through only 2 prisms: does the disruption represent an existential threat or something the incumbent can use itself to further its dominance? Previous research by Shaz urged a more multiplexed framework in looking at disruptive innovation more broadly and less dichotomously as  existential threats or opportunities.

The disruption-is-always-good bias assumes that innovation creates positive changes in society, which not everyone agrees with – for example, technological advancement has made ‘fake news’ widespread. Other scholars have argued that the key issue is not whether innovation is good or bad, but whether it stimulates useful shifts in thinking or modelling.

“We’re seeing this debate play out in real time over ChatGPT and other generative artificial intelligence,” says Shaz. “Generative AI is surely innovative and disruptive, and there is plenty of debate over whether risks outweigh opportunities – but the technology has certainly prompted lots of serious thought which can only be beneficial.”

The nature of DIT theory

Critics of DIT believe that it focuses too much on why businesses fail rather than seeking to explain more nuanced change in markets and the firms that comprise them. Some scholars have argued that DIT only really works in hindsight, while others seek to maximise its predictive potential, so this has been a controversial area. In an earlier work on “perspectives on disruptive innovation”, Shaz conceptualises the prescriptive application of DIT as ‘performativity’, where managerial actions and decisions are not strictly about making accurate predictions but rather serve as actionable blueprints to jumpstart the innovation journey. Shaz describes performativity as a prescription converted into managerial discourse and action with anticipated outcomes. ‘Language and framing’ such as a business-model pitch doesn’t just describe but also constitutes and actualises the realities that they envision through the actions they entail.

There has been discussion about the role of consumers in helping to identify opportunities for disruptive innovation. Shaz and his colleagues argue in their research that it’s important to identify “negative sentiments as adverse antecedents to disruption, characterised as disillusionment, distrust, or dissatisfaction with conventional offerings from incumbents or the overall marketplace in a given sector”.

Why findings can help strategic decision-making in organisations

The introduction of a new challenger-incumbent template for understanding disruption is designed to expand the focus of DIT by advocating a subtler approach that also highlights “the dynamic interplay between disruptors and incumbents,” says the research by Shaz.

“Our approach responds to the call for a broader, more inclusive, understanding of disruptive processes. By identifying and recalibrating key controversies within DIT, we aim to refine management theories where there is a lack of consensus, as exemplified in the case of DIT.

“In strategic decision-making, organisations across sectors can harness the power of the challenger-incumbent template to inform their approaches,” the research says. “With this new understanding, incumbent companies are better positioned to recognise potential disruptors early on. This awareness can cultivate agility in their response to emerging innovations. In contrast, challengers can strategically identify and exploit vulnerabilities within established markets.

“Acknowledging the dual nature of disruptive innovations – their capacity to drive progress alongside potential societal and economic consequences – also broadens the application of DIT. We call upon businesses and policymakers to consider these 2 facets of innovation in tandem. A more balanced approach will help to foster sustainable and ethical innovation practices, ensuring that advancements in one area do not have unintended negative impacts on others.”

Going forward, Shaz recommends that scholars approach DIT “with an appreciation of its dynamic nature, recognising that its development reflects an ongoing process rather than a fixed set of principles”.

Featured academics

Shahzad ansari.

Professor of Strategy & Innovation

View Shahzad's profile

Stephen Lile

Access Stephen's LinkedIn profile

Featured research

Lile, S., Ansari, S. and Urmetzer, F. (2024) “Rethinking disruptive innovation: unravelling theoretical controversies and charting new research frontiers.” Innovation

Fraser, J. and Ansari, S. (2021) “Pluralist perspectives and diverse responses: exploring multiplexed framing in incumbent responses to digital disruption.” Long Range Planning

Kumaraswamy, A., Garud, R. and Ansari, S. (2018) “Perspectives on disruptive innovations.” Journal of Management Studies

Yin, E., Ansari, S. and Akhtar, N. (2017) “Radical innovation, paradigm shift and incumbent’s dilemma: the case of the auto industry.” Future Studies Research Journal

Ansari, S., Garud, R. and Kumaraswamy, A. (2016) “The disruptor’s dilemma: TiVo and the U.S. television ecosystem.” Strategic Management Journal

Related articles

One of China’s largest automotive and mobile phone camera producers

This case study looks at how a company, who for the purpose of this case study we'll call 'Glass Inc.', used the Strategic Innovation Guide from Cambridge Judge Business School to identify the root cause of its slow growth, made strategic changes, and then adapted its innovation portfolio to accomplish this strategic change.

Strategic Innovation Guide case study: global leading battery manufacturer

This case study features a well known battery manufacturer, who for the purpose of the case study we'll call 'BAT'. This is the story of how, with the help of the innovation basket in the Strategic Innovation Guide from Cambridge Judge Business School, they were able to identify new strategic opportunities and make changes in their innovation portfolios to achieve ambitious growth targets.

Innovation at work: the power of serendipity

Why organisational innovation is highly dependent on increasing serendipitous occurrences at work. A book chapter co-written by Professor Matthew Grimes of Cambridge Judge Business School explores the triggers that help enable serendipity.

alumni disruptive innovation EMBA alumni Shahzad Ansari

• Free Case Studies
• Business Essays

Write My Case Study

Buy Case Study

Case Study Help

• Case Study For Sale
• Case Study Service
• Hire Writer

Business Level Strategies of Five Companies

Amreteck® Group (AG) is a pharmaceuticals service company specializes in arranging investment funds/investors and supports mergers for the pharmaceutical companies in USA & South Asian countries. AG also helps pharmaceutical companies to export its products in Least Developed Countries (LDC) including finding local distributors and complete products registration process.? AG has signed an agreement with one of the well-known Pharmacy Company in Bangladesh to export its products to the LDC countries and arranging investment funds for its proposed second manufacturing plant in Gazipur, Bangladesh.

It is involved with local Bangladeshi pharmaceutical companies to reap the benefit of low cost business environment in Bangladesh.

We Will Write a Custom Case Study Specifically For You For Only $13.90/page!

AG is following this low cost strategy to search for new ways in reducing production cost, developing new products that can be manufactured more cheaply and marketing managers to find ways to lower the costs of attracting customers. Toyota Motor Corporation primarily conducts business in the automotive industry. Toyota also conducts business in the finance and other industries.

Its business segments are automotive operations, financial services operations and all other operations.

Its automotive operations include the design, manufacture, assembly and sale of passenger cars, recreational and sport utility vehicles, minivans and trucks and related parts and accessories. Toyota pursues a combined cost leadership and differentiation strategy that is economies of scopes are relevant. A dual focus on both cost leadership and differentiation is often required across the various segments of the value chain. Toyota’s production system is reportedly the most efficient in the world.

This efficiency gives Toyota a low cost strategy in the global car industry.

At the same time Toyota has differentiated its cars from those of rivals on the basis of superior design and quality. This superiority allows the company to charge a premium price for many of its popular models. Thus Toyota seems to be simultaneously pursuing both a low cost and a differentiated business level strategy, which is called stuck in the middle. Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestle and is today the world’s biggest food and beverage company.

We employ around 250,000 people and have factories or operations in almost every country in the world. The Company’s strategies are guided by several fundamental principles. Nestle’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance.? The Company’s priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.

Nestle Company has aimed to build a business based on sound human values and principles.

Nestle believes in making a long-term commitment to the health and well being of people in every country in the scope of their operations. At Nestle Significant differentiation from traditional retail and less price transparency is followed. They follow this differentiation strategy to reduce the risk of complexity of supply chain and lower attractiveness for discounters.? Pepsico , Inc.

is one of the world’s largest food and beverage companies.

The company’s principal businesses include:? • Frito-Lay snacks? • Pepsi-Cola beverages? • Gatorade sports drinks? • Tropicana juices? • Quaker Foods? Pepsi Co merged with the Quaker Oats Company, creating the world’s fifth-largest food and beverage company, with 15 brands – each generating more than $1 billion in annual retail sales. PepsiCo’s success is the result of superior products, high standards of performance, distinctive competitive strategies and the high level of integrity of our people.? Pepsi Co follows the differentiation strategy.

Their ability to innovate is their competitive advantage. They look for opportunities to capitalize on the value of their brands by creating new products and varieties.

By innovating to meet consumer needs and preferences, they fill consumption gaps and contribute to create both healthier and indulgent choices for consumers, and bringing more enjoyment to their lives. Coca-Cola Company is the largest manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world.

Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries and include the leading soft drink products in most of these countries. The Coca-Cola Company (Coca-Cola) manufactures, distributes and markets non-alcoholic beverage concentrates and syrups, including fountain syrups, in the world. It manufactures and sells non-alcoholic beverages, primarily carbonated soft drinks and a variety of non-carbonated beverages.

It is operating in North America, Africa, East, South Asia and Pacific Rim, Europe, Latin America and North Asia, Eurasia and Middle East.

Finished beverage products bearing its trademarks are sold in more than 200 countries worldwide. The Coca Cola company follows differentiation strategy. Coca cola spends enormous amounts of money in advertising to differentiate and create a unique image for their products. It provides different products to the customers and has been very much successful in gaining a leading position among the competitors.

Related posts:

• Google’ S Business Level Strategies
• Corporate Level Strategies
• Survival Strategies for Local Companies in Emerging Markets
• Business Studies Level 3 Unit 1 P2
• International Business Strategies
• Analysis of Business Strategies of the Casual Apparel
• Coca-Cola types of segmentation strategies

Quick Links

Privacy Policy

Terms and Conditions

Testimonials

Our Services

Case Study Writing Service

Case Studies For Sale

Our Company

Welcome to the world of case studies that can bring you high grades! Here, at ACaseStudy.com, we deliver professionally written papers, and the best grades for you from your professors are guaranteed!

[email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA

Acasestudy.com © 2007-2019 All rights reserved.

Hi! I'm Anna

Would you like to get a custom case study? How about receiving a customized one?

Haven't Found The Case Study You Want?

For Only $13.90/page

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences
• Business and society
• Business management
• Entrepreneurship
• Finance and investing

Bringing the Environment Down to Earth

• Forest L. Reinhardt
• From the July–August 1999 Issue

Strategy is Different in Service Businesses

• Dan R. E. Thomas
• From the July 1978 Issue

Four Tools For Defeating Denial

• Rosabeth Moss Kanter
• December 07, 2009

The Pipe Dream of Big Marijuana Revenues

• David L Debertin
• February 05, 2014

Why Good Companies Go Bad

• Donald Sull

Cisco's CEO on Staying Ahead of Technology Shifts

• John Chambers
• From the May 2015 Issue

Rehearse and Refine Your Action Plan

• Paul Biddinger
• June 22, 2015

If at First You Don't Succeed...

• Ashley Welch
• April 17, 2019

Social-Impact Efforts That Create Real Value

• George Serafeim
• From the September–October 2020 Issue

How Leading Companies Build the Workforces They Need to Stay Ahead

• Michael Mankins
• September 06, 2017

What Is the Optimal Pattern of a Customer Journey?

• Julian De Freitas
• March 31, 2023

Strategic Analysis for More Profitable Acquisitions

• Alfred Rappaport
• From the July 1979 Issue

Sales Teams Need to Stop Focusing on the Customer Funnel

• Frank V. Cespedes
• March 13, 2023

Gaming Isn't Netflix's Best Opportunity for Growth

• Christopher Lochhead
• Nicolas Cole
• November 05, 2021

The Paradox of Marketing to Caregivers

• Ximena Garcia Rada
• Mary Steffel
• Elanor F Williams
• Michael I. Norton
• Michael Norton
• September 28, 2021

How Companies Can Meet the Needs of a Changing Workforce

• Avivah Wittenberg-Cox
• December 18, 2020

The Board's Role in Sustainability

• Robert G. Eccles
• Mary Johnstone-Louis
• Colin Mayer
• Judith C. Stroehle

Getting Real About Virtual Commerce

• Philip Evans
• Thomas S. Wurster
• From the November–December 1999 Issue

Dismantling the Sales Machine

• Brent Adamson
• Matthew Dixon
• Nicholas Toman
• From the November 2013 Issue

How China Reset Its Global Acquisition Agenda

• Peter J. Williamson
• Anand P. Raman
• From the April 2011 Issue

Note on the Technical Aspects of Programming in Nonprofit Organizations

• David W. Young
• March 13, 2013

Green ChillyZ: Redefining Market Boundaries

• Subrat Sarangi
• May 17, 2017

Note on Management Accounting in Context

• January 24, 2014

The Seven Leadership Levers Used by Successful Managers

• July 03, 2016

Municipal Decentralization in Buenos Aires: Sequel

• Howard Husock
• John D. Donahue
• Merilee Grindle
• John Thomas
• Jay H. Walder
• February 01, 1999

State Bank of India: Transforming a State Owned Giant

• Rachna Tahilyani
• March 28, 2011

Yonyou 2013

• F. Warren McFarlan
• Zheng Xiaoming
• Ziqian Zhao
• July 15, 2014

R&D Management at Universal Luxury Group - Perfumes and Cosmetics Division (A)

• Cyrille Balmes
• Manuel Sosa
• July 01, 2005
• John Mullins
• October 31, 2019

Business Process Transformation at the CIA (Epilogue)

• Steve Kelman
• August 01, 1999

Two Ways of Pursuing a Calling

• Leslie A. Perlow
• Hannah Weisman
• August 22, 2023

Preserving Trust at Care.com (A)

• Krishna G. Palepu
• Julia Kelley
• August 30, 2019

Guardian Lifecare: Customer Centricity as a Value Proposition

• Swarup Kumar Dutta
• Joseph Rojers
• May 18, 2017

The Hilton-ITT Wars

• Robert F. Bruner
• Sanjay Vakharia
• April 21, 1998

Recruiting Andrew Yard (B)

• Brian J. Hall
• Nicole Bennett
• Sara del Nido
• September 15, 2010

Moore Medical Corp.

• Andrew McAfee
• Gregory Bounds
• April 23, 2001

Chegg, Inc.: Building the Student Hub

• Thomas R. Eisenmann
• Allison M. Ciechanover

Profiling at National Mutual (C)

• John J. Sviokla
• Audris Wong
• January 23, 1991

Mastering the Dynamics of Innovation

• James M. Utterback
• November 01, 2000

Microsoft's Vega Project: Developing People and Products

• Christopher A. Bartlett
• March 26, 2000

Fundamentals of International Market Opportunity Research

• S. Tamer Cavusgil
• Gary Knight
• John Riesenberger
• Attila Yaprak
• March 01, 2009

Vertex Pharmaceuticals and the Cystic Fibrosis Foundation: Venture Philanthropy Funding for Biotech, Teaching Plan

• Robert F. Higgins
• October 17, 2012

Popular Topics

Partner center.

• Global (EN)
• Albania (en)
• Algeria (fr)
• Argentina (es)
• Armenia (en)
• Australia (en)
• Austria (de)
• Austria (en)
• Azerbaijan (en)
• Bahamas (en)
• Bahrain (en)
• Bangladesh (en)
• Barbados (en)
• Belgium (en)
• Belgium (nl)
• Bermuda (en)
• Bosnia and Herzegovina (en)
• Brasil (pt)
• Brazil (en)
• British Virgin Islands (en)
• Bulgaria (en)
• Cambodia (en)
• Cameroon (fr)
• Canada (en)
• Canada (fr)
• Cayman Islands (en)
• Channel Islands (en)
• Colombia (es)
• Costa Rica (es)
• Croatia (en)
• Cyprus (en)
• Czech Republic (cs)
• Czech Republic (en)
• DR Congo (fr)
• Denmark (da)
• Denmark (en)
• Ecuador (es)
• Estonia (en)
• Estonia (et)
• Finland (fi)
• France (fr)
• Georgia (en)
• Germany (de)
• Germany (en)
• Gibraltar (en)
• Greece (el)
• Greece (en)
• Hong Kong SAR (en)
• Hungary (en)
• Hungary (hu)
• Iceland (is)
• Indonesia (en)
• Ireland (en)
• Isle of Man (en)
• Israel (en)
• Ivory Coast (fr)
• Jamaica (en)
• Jordan (en)
• Kazakhstan (en)
• Kazakhstan (kk)
• Kazakhstan (ru)
• Kuwait (en)
• Latvia (en)
• Latvia (lv)
• Lebanon (en)
• Lithuania (en)
• Lithuania (lt)
• Luxembourg (en)
• Macau SAR (en)
• Malaysia (en)
• Mauritius (en)
• Mexico (es)
• Moldova (en)
• Monaco (en)
• Monaco (fr)
• Mongolia (en)
• Montenegro (en)
• Mozambique (en)
• Myanmar (en)
• Namibia (en)
• Netherlands (en)
• Netherlands (nl)
• New Zealand (en)
• Nigeria (en)
• North Macedonia (en)
• Norway (nb)
• Pakistan (en)
• Panama (es)
• Philippines (en)
• Poland (en)
• Poland (pl)
• Portugal (en)
• Portugal (pt)
• Romania (en)
• Romania (ro)
• Saudi Arabia (en)
• Serbia (en)
• Singapore (en)
• Slovakia (en)
• Slovakia (sk)
• Slovenia (en)
• South Africa (en)
• Sri Lanka (en)
• Sweden (sv)
• Switzerland (de)
• Switzerland (en)
• Switzerland (fr)
• Taiwan (en)
• Taiwan (zh)
• Thailand (en)
• Trinidad and Tobago (en)
• Tunisia (en)
• Tunisia (fr)
• Turkey (en)
• Turkey (tr)
• Ukraine (en)
• Ukraine (ru)
• Ukraine (uk)
• United Arab Emirates (en)
• United Kingdom (en)
• United States (en)
• Uruguay (es)
• Uzbekistan (en)
• Uzbekistan (ru)
• Venezuela (es)
• Vietnam (en)
• Vietnam (vi)
• Zambia (en)
• Zimbabwe (en)
• Financial Reporting View
• Women's Leadership
• Corporate Finance
• Board Leadership
• Executive Education

Fresh thinking and actionable insights that address critical issues your organization faces.

• Insights by Industry
• Insights by Topic

KPMG's multi-disciplinary approach and deep, practical industry knowledge help clients meet challenges and respond to opportunities.

• Advisory Services
• Audit Services
• Tax Services

Services to meet your business goals

Technology Alliances

KPMG has market-leading alliances with many of the world's leading software and services vendors.

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

• Our Industries

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

• What sets us apart

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Relevant Results

Sorry, there are no results matching your search., restaurant industry trends for 2024.

Discover key findings from restaurant executives offering a comprehensive view of industry trends and strategies in 2024. 

In these early days of 2024, the restaurant industry is moving ahead with cautious optimism following a year that saw a return to growth, albeit marked by labor, interest rate, and inflationary headwinds. 

Discover key findings from restaurant executives offering a comprehensive view of industry trends and strategies in 2024. Key commercial, operational, and investment takeaways include: 

• The vast majority of the industry experienced positive unit growth in 2023

• Most respondents  are looking to expand digital ordering options, improve loyalty programs and CRM capabilities, and invest in new POS technology

• While most restaurants are still early in their AI journeys, many are starting to identify opportunities for future investment

• At least half are actively transforming their Accounting, FP&A, and HR functions

By embracing innovation, leveraging technology, and prioritizing customer-centric approaches, restaurants can position themselves for success in an evolving market landscape. For a deeper dive into the restaurant industry trends, download our whitepaper and infographic.

Dive into our thinking:

Restaurant industry trends report

Restaurant industry trends infographic

Explore more

Consumer & Retail

We offer short- and long-term strategies to help minimize the impact of common challenges facing today’s consumer and retail businesses. These include a constantly changing environment in consumer purchasing behavior, digital disruption, rising costs, increased speed to market, and emerging competition.

On the 2024 Board agenda: Consumer & Retail

10 key issues for C&R boards as companies meet customer demands and protect margins through geopolitical and economic uncertainty.

Transforming for growth in Consumer & Retail

C&R leaders are seeking transformation as a way to uncover new sources of value and growth. Here's how to get it right.

Popular category topics

Meet our team

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement .

Job seekers

Visit our careers section or search our jobs database.

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Microsoft makes the promise of AI in healthcare real through new collaborations with healthcare organizations and partners

Mar 11, 2024 | Robert Dahdah - CVP, Health & Life Sciences

• Share on Facebook (opens new window)
• Share on Twitter (opens new window)
• Share on LinkedIn (opens new window)

Just over a year ago, the healthcare industry was energized by the debut of generative AI and the promise this new technology held for delivering real-world outcomes that positively impact clinicians, patients, health systems, and the broader health and life sciences ecosystem. Since then, it has been a catalyst for the development of new use cases, opening possibilities for an entirely new era of innovation — and this shows no signs of slowing down. We continue to see AI adoption within healthcare grow, with 79% of healthcare organizations reporting that they’re currently using AI technology, according to a Microsoft-commissioned study through IDC [i] . AI also has a demonstrable business value, with healthcare organizations realizing a return on their AI investments within 14 months, along with an average return of $3.20 for every $1 they invest in AI [ii] .

Working alongside healthcare organizations, Microsoft is making the promise of AI real by empowering the industry to tackle its biggest challenges and create a real difference in the lives of clinicians and patients. At the 2024 HIMSS Global Health Conference & Exhibition , we are highlighting how providers are adopting generative AI solutions and the impact the technology is making.

• Stanford Medicine and Microsoft announced the enterprise-wide deployment of Nuance Dragon Ambient eXperience Copilot (DAX Copilot), providing conversational, ambient and generative AI to Stanford Medicine’s clinicians. This deployment aligns with Stanford Medicine’s mission to alleviate physician burnout and enhance patient care by streamlining administrative tasks. Stanford Medicine’s commitment to innovation, coupled with DAX Copilot’s ability to automate clinical documentation, has led to significant improvements in efficiency and patient-focused care. DAX Copilot enables healthcare organizations to adopt AI-powered clinical documentation applications at scale, leveraging existing investments in our trusted and extensible Dragon solutions. Stanford Health Care clinicians who used DAX Copilot reported through a preliminary survey that 96% of physicians stated that it was easy to use, and 78% reported that it expedited clinical notetaking. About two-thirds reported that DAX Copilot saved time.
• WellSpan Health announced its widespread adoption of DAX Copilot, enhancing patient-physician interactions during exam room and telehealth visits. Leveraging generative AI, DAX Copilot automates clinical note drafting, allowing physicians to focus entirely on patients without the distraction of manual documentation. WellSpan’s decision to adopt DAX Copilot builds upon its successful use of Nuance solutions to streamline clinical workflows and improve patient care. Surveys indicate high satisfaction among physicians and patients, with DAX significantly improving the quality of interactions and reducing documentation burdens. This initiative reflects WellSpan’s commitment to delivering exceptional care experiences and addressing physician burnout by providing innovative tools to enhance efficiency and personalize care delivery.
• Providence and Microsoft announced a strategic collaboration aimed at accelerating AI innovation in healthcare. Leveraging Microsoft Cloud for Healthcare and Azure as a standard platform, the collaboration focuses on delivering AI-powered applications to improve interoperability, generate clinical insights and enhance care delivery. Past successes from this relationship include Providence’s migration to cloud solutions and the adoption of AI-powered applications like Nuance’s DAX Copilot. By leveraging their combined expertise, the collaboration aims to rapidly scale existing solutions and create more personalized experiences for patients and clinicians. Through this initiative, Providence aims to transform healthcare delivery and improve outcomes by harnessing the power of the cloud and advanced AI technologies.

Reinforcing our commitment to Responsible AI

As incredible as AI – and all its potential – is, the important role clinicians play in determining its use and enabling responsible AI guidelines is vital. That’s why we remain steadfast in our commitment to our Responsible AI principles , which help to ensure safe, fair and responsible use of the technology. As part of this ongoing commitment, Microsoft has joined a consortium of healthcare leaders to announce the formation of the Trustworthy & Responsible AI Network (TRAIN), creating one of the first health AI networks aimed at operationalizing responsible AI principles to improve the quality, safety and trustworthiness of AI in health.

Serving as the technology-enabling partner for TRAIN, Microsoft is working with members that include AdventHealth, Advocate Health, Boston Children’s Hospital, Cleveland Clinic, Duke Health, Johns Hopkins Medicine, Mass General Brigham, MedStar Health, Mercy, Mount Sinai Health System, Northwestern Medicine, Providence, Sharp HealthCare, University of Texas Southwestern Medical Center, University of Wisconsin School of Medicine and Public Health and Vanderbilt University Medical Center – to share best practices and provide tools to enable measurement of outcomes associated with the implementation of AI. Additionally, OCHIN , which serves a national network of community health organizations with solutions, expertise, clinical insights and tailored technologies, and TruBridge , a partner and conduit to community healthcare, will work with TRAIN to help ensure that every organization, regardless of resources, has access to the benefits the network offers.

Additionally, we continue to take the necessary steps to ensure healthcare organizations can implement technology in compliance with the highest levels of security and privacy in mind. We recently announced the preview of healthcare data solutions in Microsoft Fabric , which enables healthcare organizations to break down data silos and harmonize their disparate healthcare data in a single unified store where analytics and AI workloads can operate at-scale. We are also pleased to share that Fabric now supports HIPAA (Health Insurance Portability and Accountability Act) compliance , allowing our U.S. healthcare industry customers and partners to compliantly use Fabric to store, process and analyze data.

Driving innovation through the Microsoft partner ecosystem

Microsoft’s unmatched global ecosystem of trusted partners is one of the key components that helps drive our innovation forward. This week, Cognizant announced that its TriZetto Assistant on Facets will leverage Microsoft Azure OpenAI Service and Semantic Kernel to provide access to generative AI within the TriZetto user interface. This new collaboration will help increase productivity and efficiency for healthcare payers and providers, while ensuring timely responses and improved care for patients.

Additionally, Microsoft for Startups announced a new collaboration with the American Medical Association’s (AMA) Physician Innovation Network . The Physician Innovation Network is a powerful match-making tool developed by the AMA to connect physicians, care team members, business liaisons and entrepreneurs in a shared mission to enhance healthcare. The collaboration extends the reach of the Physician Innovation Network to all startup founders in the Microsoft for Startups Founders Hub, so whether they’re driven to improve healthcare, collaborate with industry leaders or learn from healthcare experts, they will have access to a unique space for connection and innovation.

Without a doubt, these are incredibly exciting times, and we are proud to see our customers and partners adopting Microsoft’s generative AI solutions and putting them to use in the real world to make a meaningful impact in the lives of clinicians and patients.  We look forward to continuing to play a leading role in fostering innovation with generative AI, and empowering healthcare providers and partners across the entire health and life sciences industries with leading-edge and responsible AI technologies that contribute to better experiences and outcomes in healthcare.

[i] IDC InfoBrief, sponsored by Microsoft, The Business Opportunity of AI: How Leading Organizations Around the World Are Using AI to Drive Impact Across Every Industry, IDC #US51364223, Nov. 2023.

[ii] IDC Resource Map Document: IDC Business Value of AI Survey, sponsored by Microsoft, IDC #US51331223, Nov. 2023.

Tags: AI , healthcare , Microsoft Copilot , Microsoft Fabric , Microsoft for Startups , Responsible AI

• Check us out on RSS

Click through the PLOS taxonomy to find articles in your field.

For more information about PLOS Subject Areas, click here .

Loading metrics

Open Access

Peer-reviewed

Research Article

Strategies to enhance the level of service and safety of rural roads: A case study

Roles Conceptualization, Data curation, Investigation, Writing – original draft

Affiliation School of Public Utility, Jiangsu Urban and Rural Construction College, Changzhou, Jiangsu Province, China

Roles Funding acquisition, Methodology, Visualization, Writing – review & editing

* E-mail: [email protected]

Affiliation Department of Transportation Engineering, College of Architectural Science and Engineering, Yangzhou University, Yangzhou, Jiangsu Province, China

Roles Formal analysis, Methodology, Validation, Writing – review & editing

Affiliations College of Transportation Engineering, Tongji University, Shanghai, China, Key Laboratory of Road and Traffic Engineering of the State Ministry of Education, Shanghai, China

• Qiannan Ai, 
• Jun Zhang, 

• Published: March 14, 2024
• https://doi.org/10.1371/journal.pone.0300525
• Peer Review
• Reader Comments

Faced with the contradiction between the increasing traffic volume and the aging road infrastructures in the rural area, this paper aims to propose feasible strategies to enhance the level of service and safety, by a case study of the rural area in the north Jintan district. In order to figure out current issues related to rural roads, a carefully designed investigation has been conducted, and the results of the two-week investigation include roads’ basic information, traffic signs and protective facilities, surrounding landscape, and etc. Based on the field driving tests, specific problems including signs category, signs installation and facility maintenance have been fully analyzed. Meanwhile, the problem of roadnet connectivity has also been pointed out through the theory of complex network, and results show that the average node clustering coefficient and shortest path length perform worse than the demonstration plot of other rural districts. For the sake of rural traffic safety and management efficiency, both quantified and qualified strategies have been put forward. The quantified strategies include the regular inspection indicators, the safety sight distance at T-type crossings, as well as the risk severity of sections and the crossings. The qualified strategies involve the management of trucks and roadworks, the setting of signalized intersections, and the timely updates of traffic signs and facilities. Finally, an intelligent management system framework has been established for rural road traffic, with highly interconnected modules of data acquisition, risk identification and information publishing.

Citation: Ai Q, Zhang J, Ye Y (2024) Strategies to enhance the level of service and safety of rural roads: A case study. PLoS ONE 19(3): e0300525. https://doi.org/10.1371/journal.pone.0300525

Editor: Ibrahim Badi, Libyan Academy, LIBYA

Received: August 12, 2023; Accepted: February 28, 2024; Published: March 14, 2024

Copyright: © 2024 Ai et al. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Data Availability: The major data supporting the findings has already shown in the manuscript, and the other data including the GIS files of regional road network and the traffic characteristics data are available on request from the Chanzhou City Planning and Design Institute, email: [email protected] , the data are not publicly available due to privacy restrictions.

Funding: Local Innovation Talent Project of Yangzhou under Grant number 2022YXBS118. Funder: Yangzhou Government, Jiangsu Province, China. Recipient: Jun Zhang The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Competing interests: The authors have declared that no competing interests exist.

Introduction

The increasing rural economy under the integration of urban and rural development has brought the increasing traffic demand on rural roads, which has become a challenge to the transportation safety and rural governance. In most rural areas of China, many factors contribute to the urgency of enhancing rural road traffic, including the rural roads construction oversight, the limitation of infrastructure maintenance, and increasing traffic conflicts or crashes between local residents and passing-by vehicles. Under the national strategy of all-around rural revitalization, the improvement of rural transportation functions as a key support, wherein establishing a lifecycle mechanism of coordinated construction, management, maintenance and operation has been put on the agenda of regional governors. The first step is to screen current rural road system for potential risks and deficiencies, and put forward possible enhancement strategies for daily managing and future planning. Generally, current literatures on the rural roads enhancement can be divided into three categories. The first is the basic infrastructure improvement, the second is the traffic safety facilities configuration, and the third is the advanced management strategies.

Studies on the improvement of basic infrastructures mainly include the road alignment and the road pavement. Road alignment improvement focuses on the interactions between road geometric parameters and driving behaviors. Based on the data of geometric alignment and surface performance of a two-lane rural road, Bella explored the corresponding influence on driving safety via theories of decision tree and Bayesian network [ 1 ]. Machiani et al. further studied drivers’ perception of curves upon an analysis of speed and lateral position on the rural roads [ 2 ]. It has also been revealed that lane width, curve length and curve radius are key factors affecting the traffic order on the rural road, using the safety performance functions [ 3 ]. By comparison, the road pavement improvement considers more on a sustainable design and maintenance. To realize the environment-friendly maintenance, Kumar and Ryntathiang studied the performance of the pavement condition index with the age of pavement, and introduced the technology of micro-surfacing [ 4 ]. Pasindu et al. performed an optimization analysis for the pavement management of the rural roadnet, upon the calculation of cumulative safety and international roughness [ 5 ]. Current literatures on the enhancement of basic infrastructure for rural roads are safety-based geometric design and pavement management, with common considerations on traffic volume, traffic composition and design speed [ 6 , 7 ], and the results can provide important references for enhancement strategies.

As to the traffic safety facilities configuration, the signs, markings, signals, and protective infrastructures are usually discussed. Griselda et al. pointed out that the completeness and correctness of markings or signs plays an important role in reducing crashes on rural highway [ 8 ]. Zhang et al. studied the visual recognizability of different traffic signs, and analyzed the impact of sight distance, lane location, occluded ratio, shape damage, and installation parameters (height, angle, size, and etc.), which can provide a solid base for regulations modification [ 9 ]. Reinolsmann et al. tested the warning distance of variable message signs on rural roads with low visibility, and designed a visualized sandstorm animation to warn drivers [ 10 ]. The method of setting traffic safety facilities for rural highway in different road sections (small curve, steep slope, rural tunnel, crossings and etc.) have also been proposed, including traffic signs, traffic markings and anti-collision facilities [ 11 ]. It can be concluded that the road alignment and traffic environment are a key basis for the configuration of safety facilities on rural roads. The configuration schemes can be improved to the level above standards by analyzing the interaction mechanisms among facility installation parameters, drivers’ perception attributes and driving behaviors.

In the aspect of advanced management strategies, a variety of updated technologies have been proposed or preliminarily applied. The safety evaluation and enhancement for road infrastructures are critical parts during daily management [ 12 , 13 ]. Vaiana et al. carried out a safety performance evaluation through the RSI approach for a high-risk rural road [ 14 ]. Faced with the deterioration of rural road infrastructure, Subedi et al. developed the priority list of road maintenance considering economic factors and technological factors [ 15 ]. Similarly, Gupta et al. further assessed the maintenance status by structural and functional parameters including pavement roughness, cracking, texture depth [ 16 ]. Meanwhile, the intelligent traffic management in the rural area has gained more attention recently. Targeting at providing effective information for travelers, Rasaizadi et al. proposed an ELP (ensemble learning process) based prediction method of traffic distribution on rural roads [ 17 ]. Considering the difference between driving perception and action, Tian et al. conduct an investigation on the Rural Intersection Conflict Warning System, and provided suggestions for delicate management [ 18 ]. David et al. proposed a model of measuring real-time carbon emissions for rural road, for the convenience of monitoring roadside air pollutions [ 19 ]. Generally, existing strategies have covered the lifecycle management of rural roads including planning, construction, operation and maintenance, but the strategies are independent from each other, the integration of different monitoring and measuring data sources appears to be the development trend for the smart management and decision.

From the foregoing literatures, it can be concluded that the enhancement of rural roads is a systematic work, while most existing literatures focus on presenting a specific method or strategy to improve the level of service or safety, it is undeniable that the proposed strategies are theoretically feasible and useful, but the methods of different studies are usually mutual separated to each other, causing the problem of global evaluation and enhancement when it comes a rural network. Most theories are not appropriate for use in rural areas due to the absence of financial support and professional engineers for rural roads. The current gap is in evaluating the status of rural roads effectively and adopting appropriate enhancement strategies correctly, taking into account their feasibility. This paper aims to illustrate the implementation method of field investigating and countermeasures analyzing, through a case study of rural roads in Jintan District, Jiangsu Province, China. Our paper is noteworthy for its presentation of a well-organized enhancement mechanism for rural roads, which consists of both practical suggestions and theoretical assessments.

The remainder of this paper is structured as follows. The Current situation investigation section describes the current situation of rural roads in the studied area, mainly introducing the road information and infrastructure characteristics. The section of Road infrastructure condition analysis performs a condition analysis of road infrastructures including traffic signs, traffic control, facility maintenance and network topology. An enhancement mechanism is presented in the Enhancement mechanism section, followed by an architecture framework of intelligent management system for rural roads. Finally, the Conclusions section ends the paper with major contributions and possible future work.

Current situation investigation

Data investigation.

Considering the peculiarity of rural roads, a general framework of field investigation is designed in Fig 1 , composed of three aspects, the basic road information, the traffic safety facility, and the roadside landscape. Among the three, the traffic safety facility has strong relationships with the other two, wherein the traffic signs and protective facilities are dependent on the road section attributes and the surrounding circumstances.

• PPT PowerPoint slide
• PNG larger image
• TIFF original image

https://doi.org/10.1371/journal.pone.0300525.g001

Taking into account the demands of future analysis and studies, the data collection methods employed in field observations and measurement are:

• Photographing method. Taking photos of roadside environment, road pavement and traffic-related facilities. The photos are used as basic references to illustrate current condition of rural roads.
• Aerial video recording. Recording the traffic status of rural road sections and signal-control intersections with UAVs (unmanned aerial vehicle). The aerial videos are the basis of road traffic analysis, including traffic volume, traffic density and conflicts distribution.
• Positioning method. Using GIS map tools to mark the locations of inspected infrastructures, facilities, and signs in synchronization with the photographing method.
• Trajectory recording method. Recording the trajectory data during the repeated paths driving test, which is utilized for the speed distribution analysis and travel time estimation. Dynamic path management for trucks and traffic guidance for reconstruction sections can be aided by the trajectory data.
• Physical Measurement. Using tape measures, it is possible to measure the physical parameters of road infrastructures and signs, including lane width, sign size and location, guardrail length, and other parameters. Safety checks and evaluations of traffic facilities depend heavily on measurement data.
• History data investigation. Obtaining the data like area population distribution, road maintenance records, road accidents record from the published data of local government and transportation sectors. Indicators calculation and prediction can be utilized with these types of data, particularly for decision making in traffic control and infrastructure maintenance.

Roads information

The area of study is the northern rural zone of Jintan district, situated in the southwest of Changzhou, China. The field investigation was conducted from 1 st to 22 nd , Jun 2023, approved by the Science and Technology Bureau of Changzhou, where the major roads and key connecting branches are involved, excluding the ways accessing villages, as shown in Fig 2 . The major information of major investigated rural roads is indicated in Table 1 . All roads in the study area share a same climate condition, the average daily rainfall is about 2.91 mm, where days with rainfall over 10 mm only accounts for 2.85% of the whole year. Meanwhile, the average wind speed is about 3.3 m/s, and the average daily sunshine percentage is about 46%.

(Republished from TransCAD under a CC BY license, with permission from Caliper Corporation, original copyright 2024).

https://doi.org/10.1371/journal.pone.0300525.g002

https://doi.org/10.1371/journal.pone.0300525.t001

In Table 1 , the types of cross-section types are classified into four kinds according to the actual situation of the studied area, as indicated in Table 2 .

https://doi.org/10.1371/journal.pone.0300525.t002

The following three points summarize the general condition of rural roads within the study area based on the investigated data.

• 29% of the studied road sections are dual carriageways designed with bi-directional 4 motor lanes, where the central isolation forms are different. E.g., the Jinsha road adopts the central green belt to isolate contrary carriageways, while the North Huanyuan road uses the guardrail, as shown in Fig 3 .
• 84% of the investigated road sections are the asphalt pavement, which can provide a better driving comfortability. As shown in Fig 4 , the rest of the road sections are paved with cement, which presents serious problems with cracks and depressions.
• 5% of the road sections are triple carriageways, distributed along the Jinzhuang Road and the X203 Road, especially the sections passing through the town area, as indicated in Fig 5 . Due to the large demand of non-motorized traffic, barriers have been installed to isolate the motor lanes from the bilateral non-motorized lanes, in order to guarantee the safety of traffic participants.

https://doi.org/10.1371/journal.pone.0300525.g003

https://doi.org/10.1371/journal.pone.0300525.g004

https://doi.org/10.1371/journal.pone.0300525.g005

Traffic signs and safety facilities

Three representative roads, Baita Road, X302, and Jianshe Road, were chosen to reflect the traffic facility distribution on rural roads.

Baita Road.

The investigated road section spans from the BT-JC intersection to the BT-NJH intersection, with a total length of 4.4 km. Two motor lanes and two non-motorized lanes are located on a single carriageway in the investigated section. The cross section parameters together with traffic signs and facilities are indicated in Fig 6 , where the major facilities are warning signs, prohibition signs and protection infrastructures.

• Warning signs The current road section has major warning signs such as pedestrian crossings, hazardous locations, and crossings. Children’s caution signs are placed above the motor lanes in the area near schools.
• Prohibition signs Speed limit signs are distributed in the places along the town area and the factory area, and the weight limit signs are further installed before bridges to limit vehicles axle weight. No-parking signs are scattered to ensure the right-of-way for non-motorized traffic.
• Protection infrastructures Even though there are barriers between motor lanes and non-motor lanes, guardrails are installed along parts of slopes or rivers.

https://doi.org/10.1371/journal.pone.0300525.g006

The investigated road section spans from the X302-X203 intersection to the X302-JSH intersection, with a total length of 12.5 km. The investigated section is a 10 meters wide single carriageway without bilateral non-motorized lanes. The basic condition of cross section and related facilities are shown in Fig 7 .

• Warning signs. Because there exists large number of villages near current road, the warning signs of non-signalized T type crossing and village caution are distributed along X302. Meanwhile, in the section with poor visibility and alignment, sings like sharp turn and side road are also set accordingly.
• Prohibition signs. Most speed limits of X302 are 60 km/h, while in the section passing town area, the speed limits will decrease to 30km/h. Due to the branch ways connecting villages and current road, yield signs have been set on the corner of the branch way. No-parking signs are also laid along the busy town sections.
• Protection infrastructures. Fluorescent arrow signs and guardrails are not the only safety measures on dangerous roads. Vibration markings and red-white posts are also often distributed. The vibration markings are placed before the bends as a reminder of slowing down, and the red-white reflective posts are used to identify the crossings of branch ways.

https://doi.org/10.1371/journal.pone.0300525.g007

Jianshe Road.

The investigated road section spans from the JS-X302 intersection to the southern provincial road, with a total length of 9 km. The corresponding cross section is similar to the Baita Road. Major signs and facilities are indicated in Fig 8 .

• Warning signs. Compared with the foregoing sections, current road section is another equipped with signs of narrow roads.
• Prohibition signs. The major prohibition signs on current road include the signs of speed limits, weight limits and the no overtaking, where the no overtaking signs are placed along the curve sections.
• Protection infrastructures. The current road has a variety of traffic protection infrastructures. Besides the abovementioned side guardrails and surface vibration markings, the yellow flashing lights are deployed to remind drivers slowing down, and the warning lights and message boards are specially set before the adjacent branches to identify the non-signalized crossings.

https://doi.org/10.1371/journal.pone.0300525.g008

Road infrastructure condition analysis

According to the investigated data of rural road sections, the problems and enhancement strategies have been discussed from the perspectives of facility configuration, traffic management and maintenance, and network topology.

Adopted standards and guidelines.

Two standards are the primary basis for inspecting traffic signs. One is the Road Traffic Signs and Markings (GB5768.2–2022), the national standard applied in China. And the other is the Road Traffic Sign Panels (JT/T 279–2004), issued by the Ministry of Transport. Generally, the adopted standards are summarized from the following three perspectives according to our study focus. It should be pointed out that the adopted standards and guidelines for facility inspection are restricted to China, as rural road transportation conditions vary in different countries and regions.

Quantified standards for sign size and appearance.

• The size of sign panels should conform to the related standards in GB5768.2, where the acceptable size deviation is ± 5mm for normal panels, and ± 0.5% for panels longer than 1.2m.
• Sign panels should have a flat surface with less than 3mm/m unevenness.
• The following defects are not allowed on the traffic sign panels: cracks, wrinkles and peeling-off edges; obvious scratches, damages and the non-uniform color painting; blisters or bubbles larger than 10 mm2 on any surface of a 50cm×50cm size; the uneven retroreflective performance.
• The size of sign panels depends on the roads design speed. Table 3 shows the corresponding sizes of different prohibitions and size shapes for rural roads with a design speed between 40 km/h and 70 km/h.

https://doi.org/10.1371/journal.pone.0300525.t003

Requirements for sign angles.

• The installation angle should avoid the glare to drivers from the sign panel.
• It is important that the roadside traffic signs are either vertically aligned with the road centerline or at a specific angle from that direction. Specifically, the angle of prohibition signs and directional signs should be 0~10° or 30~45°, the angle of warning signs and guiding signs should be 0~10°. As indicated in the Fig 9 .

https://doi.org/10.1371/journal.pone.0300525.g009

Regulations for sign locations.

Due to the large number of T-type crossings or non-signalized crossings, special focuses are paid on the yielding signs and branch way posts.

The stop yielding signs should be installed on the mouth of branch way under the following conditions: the left-turn motor traffic needs control, or the conflict between motor traffic and non-motor traffic needs control; the crossing sight distance is limited or the intersection is a hazardous location; the signal intersection without all day 24-hour control.

As compared to the stop yielding signs, the speed reduction yielding signs can be installed at the mouth of branch way with a better sight distance or a lower accident risk, or at the entrances of non-signal roundabouts.

The branch way posts should be installed on the two sides of branch mouth, in order to warn the drivers along the main road against the potential conflict with vehicles from the branch way. The location and feature of branch way posts are illustrated in Fig 10 .

https://doi.org/10.1371/journal.pone.0300525.g010

Traffic facility configuration

Despite the fact that the investigated rural roads have equipped with a variety of warning signs and prohibition signs, there do exist obvious defects in the aspects of sign type, install location and timely update.

Traffic signs types.

The following traffic signs are missed along the road sections considering the surrounding landscapes and traffic characteristics, as shown in Fig 11 .

• Speed limit release signs. The top speed of rural roads is 60 km/h, and the speed will be limited to 30 km/h or 20km/h in the accident hazardous sections and the town area sections under the roadside warning signs, but the speed limit release signs are seldom set in the investigated road net. It is necessary to tell drivers the boundary of speed limit section, so that the drivers can decide when to accelerate to save the trip time.
• No tooting signs. In the road sections passing through the street community and town market, no tooting signs should be placed appropriately in order to facilitate the construction of a peaceful and harmonious rural community [ 20 ].
• Continuous curve signs. For those adjacent road sections with sharp or big curves, the single sharp turn signs should be updated to the continuous curve signs, in order to inform the drivers of poor alignments ahead.
• Livestock caution signs. During the investigation, it is found that some sheep or geese groups will cross the rural road, while the traffic speed is relatively higher. Therefore, it is indispensable to set the livestock caution signs in the related section, together with the signs of speed limit at 30 km/h.
• Other warning signs. Other warning signs including the Y-type crossings, staggered crossings and hump bridges should also be installed in the appropriate road section.

https://doi.org/10.1371/journal.pone.0300525.g011

Install location.

The problems of traffic related signs and facilities location are:

• Guardrail missing. The guardrails mainly refer to the roadside guardrails. Some road sections along the river have not installed the guardrail due to the existence of trees or barriers.
• Occluded signs. Along the rural roads, a great many of the signs are occluded by the trees, buildings and telegraph poles, and some sign columns are set to a wrong angle, which will affect the perception and action of drivers. Therefore, it is suggested to clear the surrounding area of current occluded signs, or set the signs in a more apparent location without occlusion.
• Overlapped signs. In some special area like bridges and streets, the phenomenon that several kinds of warning signs and prohibition signs are installed together, namely the information are displayed too intensive, which is adverse for drivers to perceive information effectively.

Facility updates and maintenance.

In the rural area, traffic safety related facilities lack timely updates and maintenance, mainly reflected in the following aspects.

• Different degrees of damage and fade of traffic signs. The fade of yellow warning signs will affect the night visibility, and the common damage status include the tilted column, the folded or bent sign and the worn surface upon our investigation. According to the observation data, the reflective performance of faded signs has decreased by 15% to 40%.
• Unclear road surface markings. Under the influence of road cracks, some motor lane lines and center lines are worn away to varying degrees, making it harder to distinguish the solid lines and the dotted lines. The aggregate length of road sections with unclear markings is about 6.1 km.
• Broken branch way posts. Some red-white posts used to identify branch ways are broken, and some posts lost the reflective coatings. According to the regulations for branch way posts, nearly 1/3 non-signal control T-type crossings are found disqualified both in the number of posts and in the height of posts.
• Bended guardrails, Along the section with adjacent rivers or lakes, some roadside guardrails have been hit by vehicles and become bended for a long while. It is suggested to inspect the status of guardrails and conduct timely maintenance.

Traffic management and maintenance

The following three kinds of traffic control risks are found during our investigation.

• Trucks traffic management The rural area being studied has several industry parks and factories that produce energy, chemical, and building materials, which leads to a significant demand for truck traffic. On one hand, the phenomenon of trucks illegal parking has occupied some road sections, making it difficult for vehicles to meet. On the other hand, the heavy trucks have caused severe problems of road surface cracks [ 21 ] and fugitive dusts, especially on the cement paved roads. Hence, it is significant to enhance the management of trucks by setting parking rules and planning driving routes.
• Non-signalized crossings control The non-signalized crossings along the rural roads mainly include the T type crossings and the Y type crossings under the priority control rules, by setting the yield signs on branch ways. Due to the presence of lush shrubs and trees along the roads, the sight triangle was unable to satisfy the driving visibility demand, resulting in merging conflicts at the intersection.
• Roadworks management During the investigation period, some road sections are being rebuilt or maintained, and the necessary management measures need to be enhanced. In the micro section traffic safety organization, the current measure is just place speed limit signs and warning signs before the work area, without signs of narrow road or lane blockage, nor the protection facilities like anti-collision buckets and cones. At the global network level, there lacks bulletin boards displaying roadwork information and path guidance suggestion on the adjacent road, which may increase the detour distance of some vehicles.
• Road surface maintenance Due to the repeated demand of heavy trucks, roads around the industry parks and factories have suffered from surface cracks, as indicated in Fig 4 . The cracks will affect the driving stability and comfortability, especially threatening the safety of non-motorized vehicles on the single carriageway section.

Rural roadnet connectivity

The relation between road accessibility and rural economics has been verified in current studies [ 22 ]. In order to analyze the roadnet connectivity of studied area, the theory of complex network is applied here to calculate the corresponding indicators, mainly including the degree centrality, the clustering coefficient and the average shortest path length [ 23 ]. The results of complex network analysis will support the evaluation of the level of service and safety. The undirected network is output upon the adjacency matrix of the actual roadnet, as indicated in Fig 12 .

https://doi.org/10.1371/journal.pone.0300525.g012

Degree centrality.

To describe the connectivity between the current node and it’s adjacent nodes, the indicator of degree centrality is used. The degree of node i is defined by the number of its surrounding edges ki . E.g., the degree of an intersection point is 4, the degree of a T-type crossing is 3, and the degree of a dead-end road section is 1.

The node degree distribution is shown in Fig 13(A) . The node degree in the current network ranges from 1 to 4, with an average node degree of 2.7, which approaches the degree of T-type or Y-type crossings, validating that there exist many T-type crossings in the area.

https://doi.org/10.1371/journal.pone.0300525.g013

Clustering coefficient.

Via self-coded batch processing algorithm, the clustering coefficient of 72 nodes are indicated in Fig 13(B) . It is obvious that most of the surrounding nodes are not connected to each other. Only 9 nodes’ clustering coefficient are above zero, and the average clustering coefficient is about 0.028. The connection levels of the overall network nodes are inferior to those of the nodes in the urban roadnet.

Average length of shortest paths.

https://doi.org/10.1371/journal.pone.0300525.g014

In order to analyze the connectivity level, we have performed a comparison analysis between the studied area and the rural areas with high-quality roadnet construction, as indicated in Table 4 . The average node degree of the studied area is slightly higher than the Feixi district, while lower than the Huzhou and Enshi district, because the latter two rural districts own more signalized intersections. Meanwhile, the studied area underperforms in the other two indicators, indicating that the local accessibility and connectivity need improvement.

https://doi.org/10.1371/journal.pone.0300525.t004

Enhancement mechanism for rural roads infrastructure

Enhancement rules..

Targeting at the high-quality development of rural roads, the following four rules have been put forward in order to achieve the status where drivers enjoy their trips and goods enjoy their circulations.

• Classified management. The management scheme should consider the differences among rural roads with different conditions and realize a problem-oriented enhancement.
• Symbiotic development. Since the rural roads major serve the demands of passenger and freight traffic in the rural districts, the enhancement or reconstruction should merge into the development of ecological country or tourist town, providing coordinated infrastructures and facilities for local development.
• Multi-pronged measures. In order to enhance globally, it is necessary to incorporate road traffic safety, network connectivity, and service sustainability measures, while also focusing on the integrated lifecycle development of planning, construction, management, and maintenance.
• Clear liabilities. It is of urgent need to improve the liability system of rural road management, where the duties of local government, transport management department, law-enforcing department and agricultural sector should be clarified hierarchically.

Enhancement strategies

Quantified traffic safety inspection..

The result of field observation and measurement shows that current configurations of traffic facilities on rural roads are not optimistic, lagging behind the national and industrial standards. In order to scientifically assess the level of road service and safety, an assessment framework is established considering the indicators from perspective of road alignment infrastructure, roadside landscape, traffic condition, traffic signs and protection facilities, as indicated in Tables 5 and 6 , where the road alignment, roadside landscape and traffic condition belong to the auxiliary indicators, and the others are categorized as the fundamental indicators.

https://doi.org/10.1371/journal.pone.0300525.t005

https://doi.org/10.1371/journal.pone.0300525.t006

Traffic control enhancement.

According to the investigation results, rural road traffic is more susceptible to uncertainty and illegal activity than urban road traffic. E.g., over-speeding behaviors occur frequently on low-volume sections according to aerial video analysis, which makes crossings dangerous. The traffic control of rural roads can be enhanced from the following perspectives.

• (1) Signalized crossings setting. With the development of rural economy, the traffic volume will arise accordingly. Based on the particular investigation on network traffic volumes distribution, some non-signalized intersections with higher volumes should be updated as signal control crossings to reduce the merging conflicts, where the decision of timing scheme should consider the dynamicity of volumes temporal distribution.
• (2) Visibility enhancement for non-signalized crossings. As shown in Fig 15 , the sight triangle should both consider the sight point, sight boundary and sight angle, where the sight boundary is the axis of the outer lane, and the sight angle is 60°. The sight distance S 1 and S 2 are calculated by Eq ( 3 ) and Eq ( 4 ) respectively.

https://doi.org/10.1371/journal.pone.0300525.g015

Taking the crossing of a two-carriageways road and a single-carriageway branch, the sight distance S 1 should be at least 11.75 meters, S 2 should be 20.4 m. Meanwhile, the shrubs or structures inside the clear area should be controlled under 1.2 m, according to the Specification for design of intersections (CJJ152-2010) published by the Ministry of Housing and Urban-Rural Development of China.

• (3) Truck management. Based on the location of industries and factories, it is necessary to plan the regular truck driving paths on the rural network. Guardrails or barriers are required on the road sections of trucks driving paths, and asphalt pavement is required. Meanwhile, the parking area and no-tooting sections should also be planned in advance.
• (4) Roadwork management. To minimize conflicts in the construction area, traffic flow organizations near the roadwork area should pay attention to the occupancy status of the lanes [ 25 ]. Taking the roadwork occupying half range of a 4-lane road as an example, the local distribution of traffic signs and facilities should be roadwork warning sign, speed limit sign, narrow road sign, anti-collision facilities and speed release signs in sequence. If the road section is full occupied, besides the warning signs of road blockage and no passing, regional paths guiding boards are suggested to install around the area to realize the microsimulation of network flows, as indicated in Fig 16(A) and 16(b).

https://doi.org/10.1371/journal.pone.0300525.g016

Intelligent management system for rural roads.

In order to effectively enhance the performance of rural road network and conduct real-time control strategies, a framework of intelligent management system is presented in this section, as indicated in Fig 17 .

(The two maps are republished from TransCAD under a CC BY license, with permission from Caliper Corporation, original copyright 2024).

https://doi.org/10.1371/journal.pone.0300525.g017

The system is composed of the following basic modules.

• (1) Data acquisition module. The data acquisition module is an integrated database of video-based data, the sensor-based data and the historical data. The video-based data include the traffic volume, vehicle velocity and traffic density, which can be extracted from the video upon mature algorithms and theories of traffic-related image recognition [ 26 ]. The video data can be provided by the fixed cameras and the unmanned aerial vehicles. The sensor-based data include the traffic noise, vehicles emission and truckloads. The historical data include traffic accidents, maintenance record, pavement roughness, GIS data and etc., where the pavement roughness data are collected by periodic laser scanning.
• (2) Risk identification module. Based on the data of historical traffic accident, flow characteristics and road infrastructures, current module is designed to identify the road sections risk distribution, and find out locations with poor safety status. The use of hierarchical analysis or fuzzy clustering method can help identify the safety status, allowing for better daily management and regular inspection. As indicated in Fig 17 , the global risk distribution of rural road network is reflected by a heat map, where a deeper color means a higher severity of road sections, with a higher possibility of traffic conflicts or a worse condition of road infrastructures. The risk severity of the section and the crossing are quantified by Eq ( 5 ) and Eq ( 6 ) respectively. Results show that over 35% of road sections and crossings in the town area suffer from higher risk perturbations.

In Eq ( 5 ), R se refers to the section risk severity; P se denotes the basic accident probability on current road section; V se is the daily traffic volume from 8:00 am to 9:00 pm, PCU/day; Cap se is the corresponding lane capacity, PCU/day, affected by the lane width, cross-section type and speed limit; V tr is the volume of trucks, veh/day, and PCE tr is the passenger car equivalent of trucks used to convert V tr to standard volume, usually takes the value of 4; L da is the length of damaged road surface including cracks and depressions, km; L se is the length of current road section, km.

• (3) Information publishing module. The purpose of this module is to quantitatively analyze and visualize important data, including real-time network accessibility, traffic flow, emission, noise distribution, illegal traffic behavior, and other relevant information. Meanwhile, the published information should be shared among transportation departments, village committees and local governors, for the convenience of coordinated administration.

Conclusions

This main contribution of this paper lies in improving the level of service and safety for rural roads through the following two aspects. The first is the evaluation methodology for rural roads infrastructures, composed of field investigation, traffic facility configuration, management and maintenance, and network connectivity. The field study reveals that the common problems of rural roads are safety infrastructure maintenance and traffic operation management, arriving from the outdated construction standards and the long-term absence of effective supervision, e.g. the number of effective warning signs only accounts for 69% according to the standards. The second is the enhancement mechanism, including the evaluation tables composed of quantifiable indicators, the specific strategies from local traffic enhancement to global improvement, and the necessary modules for the establishment of intelligent management system. The proposed framework of rural roads management has integrated technologies of multi-source data analysis, risk visualization and assistant decision. Although every strategy is feasible and reliable under current theory and technology, some strategy can only be implemented by the combined efforts of relevant engineers, administrators and managers.

Meanwhile, during our analysis and evaluation, it is found that there exists a strong relation between the traffic characteristics and the level of service and safety, e.g., the higher proportion of trucks and lorries usually corresponds to a worse pavement condition, a worse signs and markings visibility and a higher traffic conflict rate. Therefore, it is of great urgency to establish the intelligent management system for rural roads, with embedded technologies of multi-source data analysis, risk visualization and assistant decision.

Current research is our first step into the field of rural roads management. Our future research will be focused on the emergency management of rural roads under adverse weather conditions [ 27 , 28 ], such as the heavy rainfall and the snowstorm, which will cause the disruption or blockage of partial road sections. The specific studies include the road network resilience evaluation and the paths reorganization algorithm, in order to realize a safe and efficient traffic round-the-clock.

Acknowledgments

The authors deeply thank professorate senior engineer Wei Shen in Chanzhou City Planning and Design Institute for his assistance in field data acquisition.

• View Article
• Google Scholar
• 2. Machiani SG, Medina A, Gibbons R, Williams B. Driver behavior modeling on horizontal curves for two-lane rural roads Using Naturalistic Driving Data. Transportation Research Board 95th Annual Meeting, Washington DC, United States, 2016.
• 4. Kumar R, Ryntathiang TL. Rural road preventive maintenance with microsurfacing. IJCA Proceedings on International Conference on Emerging Frontiers in Technology for Rural Area (EFITRA-2012). Available from: https://www.ijcaonline.org/proceedings/efitra/number4/5954-1026
• PubMed/NCBI
• 13. Zhang M, Gao S. Evaluation of Rural Road Asphalt Pavement Performance Based on Matter Element Analysis. 2nd International Conference on Civil Engineering and Rock Engineering (ICCERE), 2017.
• 18. Tian D, Morris N, Libby D. Rural intersection conflict warning system evaluation and design investigation. Center for Transportation Studies, University of Minnesota, 2018. Available from: https://hdl.handle.net/11299/198534
• 26. Algiriyage N, Prasanna R, Doyle EEH, Stock K, Johnston DM, Punchihewa M, et al. Towards real-time traffic flow estimation using YOLO and SORT from surveillance video footage. ISCRAM 2021 Conference Proceedings– 18th International Conference on Information Systems for Crisis Response and Management. Blacksburg, USA, 2021.

The Philippines economy in 2024: Stronger for longer?

The Philippines ended 2023 on a high note, being the fastest growing economy across Southeast Asia with a growth rate of 5.6 percent—just shy of the government's target of 6.0 to 7.0 percent. 1 “National accounts,” Philippine Statistics Authority, January 31, 2024; "Philippine economic updates,” Bangko Sentral ng Pilipinas, November 16, 2023. Should projections hold, the Philippines is expected to, once again, show significant growth in 2024, demonstrating its resilience despite various global economic pressures (Exhibit 1). 2 “Economic forecast 2024,” International Monetary Fund, November 1, 2023; McKinsey analysis.

The growth in the Philippine economy in 2023 was driven by a resumption in commercial activities, public infrastructure spending, and growth in digital financial services. Most sectors grew, with transportation and storage (13 percent), construction (9 percent), and financial services (9 percent), performing the best (Exhibit 2). 3 “National accounts,” Philippine Statistics Authority, January 31, 2024. While the country's trade deficit narrowed in 2023, it remains elevated at $52 billion due to slowing global demand and geopolitical uncertainties. 4 “Highlights of the Philippine export and import statistics,” Philippine Statistics Authority, January 28, 2024. Looking ahead to 2024, the current economic forecast for the Philippines projects a GDP growth of between 5 and 6 percent.

Inflation rates are expected to temper between 3.2 and 3.6 percent in 2024 after ending 2023 at 6.0 percent, above the 2.0 to 4.0 percent target range set by the government. 5 “Nomura downgrades Philippine 2024 growth forecast,” Nomura, September 11, 2023; “IMF raises Philippine growth rate forecast,” International Monetary Fund, July 16, 2023.

For the purposes of this article, most of the statistics used for our analysis have come from a common thread of sources. These include the Central Bank of the Philippines (Bangko Sentral ng Pilipinas); the Department of Energy Philippines; the IT and Business Process Association of the Philippines (IBPAP); and the Philippines Statistics Authority.

The state of the Philippine economy across seven major sectors and themes

In the article, we explore the 2024 outlook for seven key sectors and themes, what may affect each of them in the coming year, and what could potentially unlock continued growth.

Financial services

The recovery of the financial services sector appears on track as year-on-year growth rates stabilize. 6 Philippines Statistics Authority, November 2023; McKinsey in partnership with Oxford Economics, November 2023. In 2024, this sector will likely continue to grow, though at a slower pace of about 5 percent.

Financial inclusion and digitalization are contributing to growth in this sector in 2024, even if new challenges emerge. Various factors are expected to impact this sector:

• Inclusive finance: Bangko Sentral ng Pilipinas continues to invest in financial inclusion initiatives. For example, basic deposit accounts (BDAs) reached $22 million in 2023 and banking penetration improved, with the proportion of adults with formal bank accounts increasing from 29 percent in 2019 to 56 percent in 2021. 7 “Financial inclusion dashboard: First quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024.
• Digital adoption: Digital channels are expected to continue to grow, with data showing that 60 percent of adults who have a mobile phone and internet access have done a digital financial transaction. 8 “Financial inclusion dashboard: First quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024. Businesses in this sector, however, will need to remain vigilant in navigating cybersecurity and fraud risks.
• Unsecured lending growth: Growth in unsecured lending is expected to continue, but at a slower pace than the past two to three years. For example, unsecured retail lending for the banking system alone grew by 27 percent annually from 2020 to 2022. 9 “Loan accounts: As of first quarter 2023,” Bangko Sentral ng Pilipinas, February 6, 2024; "Global banking pools,” McKinsey, November 2023. Businesses in this field are, however, expected to recalibrate their risk profiling models as segments with high nonperforming loans emerge.
• High interest rates: Key interest rates are expected to decline in the second half of 2024, creating more accommodating borrowing conditions that could boost wholesale and corporate loans.

Supportive frameworks have a pivotal role to play in unlocking growth in this sector to meet the ever-increasing demand from the financially underserved. For example, financial literacy programs and easier-to-access accounts—such as BDAs—are some measures that can help widen market access to financial services. Continued efforts are being made to build an open finance framework that could serve the needs of the unbanked population, as well as a unified credit scoring mechanism to increase the ability of historically under-financed segments, such as small and medium-sized enterprises (SMEs), to access formal credit. 10 “BSP launches credit scoring model,” Bangko Sentral ng Pilipinas, April 26, 2023.

Energy and Power

The outlook for the energy sector seems positive, with the potential to grow by 7 percent in 2024 as the country focuses on renewable energy generation. 11 McKinsey analysis based on input from industry experts. Currently, stakeholders are focused on increasing energy security, particularly on importing liquefied natural gas (LNG) to meet power plants’ requirements as production in one of the country’s main sources of natural gas, the Malampaya gas field, declines. 12 Myrna M. Velasco, “Malampaya gas field prod’n declines steeply in 2021,” Manila Bulletin , July 9, 2022. High global inflation and the fact that the Philippines is a net fuel importer are impacting electricity prices and the build-out of planned renewable energy projects. Recent regulatory moves to remove foreign ownership limits on exploration, development, and utilization of renewable energy resources could possibly accelerate growth in the country’s energy and power sector. 13 “RA 11659,” Department of Energy Philippines, June 8, 2023.

Gas, renewables, and transmission are potential growth drivers for the sector. Upgrading power grids so that they become more flexible and better able to cope with the intermittent electricity supply that comes with renewables will be critical as the sector pivots toward renewable energy. A recent coal moratorium may position natural gas as a transition fuel—this could stimulate exploration and production investments for new, indigenous natural gas fields, gas pipeline infrastructure, and LNG import terminal projects. 14 Philippine energy plan 2020–2040, Department of Energy Philippines, June 10, 2022; Power development plan 2020–2040 , Department of Energy Philippines, 2021. The increasing momentum of green energy auctions could facilitate the development of renewables at scale, as the country targets 35 percent share of renewables by 2030. 15 Power development plan 2020–2040 , 2022.

Growth in the healthcare industry may slow to 2.8 percent in 2024, while pharmaceuticals manufacturing is expected to rebound with 5.2 percent growth in 2024. 16 McKinsey analysis in partnership with Oxford Economics.

Healthcare demand could grow, although the quality of care may be strained as the health worker shortage is projected to increase over the next five years. 17 McKinsey analysis. The supply-and-demand gap in nursing alone is forecast to reach a shortage of approximately 90,000 nurses by 2028. 18 McKinsey analysis. Another compounding factor straining healthcare is the higher than anticipated benefit utilization and rising healthcare costs, which, while helping to meet people's healthcare budgets, may continue to drive down profitability for health insurers.

Meanwhile, pharmaceutical companies are feeling varying effects of people becoming increasingly health conscious. Consumers are using more over the counter (OTC) medication and placing more beneficial value on organic health products, such as vitamins and supplements made from natural ingredients, which could impact demand for prescription drugs. 19 “Consumer health in the Philippines 2023,” Euromonitor, October 2023.

Businesses operating in this field may end up benefiting from universal healthcare policies. If initiatives are implemented that integrate healthcare systems, rationalize copayments, attract and retain talent, and incentivize investments, they could potentially help to strengthen healthcare provision and quality.

Businesses may also need to navigate an increasingly complex landscape of diverse health needs, digitization, and price controls. Digital and data transformations are being seen to facilitate improvements in healthcare delivery and access, with leading digital health apps getting more than one million downloads. 20 Google Play Store, September 27, 2023. Digitization may create an opportunity to develop healthcare ecosystems that unify touchpoints along the patient journey and provide offline-to-online care, as well as potentially realizing cost efficiencies.

Consumer and retail

Growth in the retail and wholesale trade and consumer goods sectors is projected to remain stable in 2024, at 4 percent and 5 percent, respectively.

Inflation, however, continues to put consumers under pressure. While inflation rates may fall—predicted to reach 4 percent in 2024—commodity prices may still remain elevated in the near term, a top concern for Filipinos. 21 “IMF raises Philippine growth forecast,” July 26, 2023; “Nomura downgrades Philippines 2024 growth forecast,” September 11, 2023. In response to challenging economic conditions, 92 percent of consumers have changed their shopping behaviors, and approximately 50 percent indicate that they are switching brands or retail providers in seek of promotions and better prices. 22 “Philippines consumer pulse survey, 2023,” McKinsey, November 2023.

Online shopping has become entrenched in Filipino consumers, as they find that they get access to a wider range of products, can compare prices more easily, and can shop with more convenience. For example, a McKinsey Philippines consumer sentiment survey in 2023 found that 80 percent of respondents, on average, use online and omnichannel to purchase footwear, toys, baby supplies, apparel, and accessories. To capture the opportunity that this shift in Filipino consumer preferences brings and to unlock growth in this sector, retail organizations could turn to omnichannel strategies to seamlessly integrate online and offline channels. Businesses may need to explore investments that increase resilience across the supply chain, alongside researching and developing new products that serve emerging consumer preferences, such as that for natural ingredients and sustainable sources.

Manufacturing

Manufacturing is a key contributor to the Philippine economy, contributing approximately 19 percent of GDP in 2022, employing about 7 percent of the country’s labor force, and growing in line with GDP at approximately 6 percent between 2023 and 2024. 23 McKinsey analysis based on input from industry experts.

Some changes could be seen in 2024 that might affect the sector moving forward. The focus toward building resilient supply chains and increasing self-sufficiency is growing. The Philippines also is likely to benefit from increasing regional trade, as well as the emerging trend of nearshoring or onshoring as countries seek to make their supply chains more resilient. With semiconductors driving approximately 45 percent of Philippine exports, the transfer of knowledge and technology, as well as the development of STEM capabilities, could help attract investments into the sector and increase the relevance of the country as a manufacturing hub. 24 McKinsey analysis based on input from industry experts.

To secure growth, public and private sector support could bolster investments in R&D and upskill the labor force. In addition, strategies to attract investment may be integral to the further development of supply chain infrastructure and manufacturing bases. Government programs to enable digital transformation and R&D, along with a strategic approach to upskilling the labor force, could help boost industry innovation in line with Industry 4.0 demand. 25 Industry 4.0 is also referred to as the Fourth Industrial Revolution. Priority products to which manufacturing industries could pivot include more complex, higher value chain electronic components in the semiconductor segment; generic OTC drugs and nature-based pharmaceuticals in the pharmaceutical sector; and, for green industries, products such as EVs, batteries, solar panels, and biomass production.

Information technology business process outsourcing

The information technology business process outsourcing (IT-BPO) sector is on track to reach its long-term targets, with $38 billion in forecast revenues in 2024. 26 Khriscielle Yalao, “WHF flexibility key to achieving growth targets—IBPAP,” Manila Bulletin , January 23, 2024. Emerging innovations in service delivery and work models are being observed, which could drive further growth in the sector.

The industry continues to outperform headcount and revenue targets, shaping its position as a country leader for employment and services. 27 McKinsey analysis based in input from industry experts. Demand from global companies for offshoring is expected to increase, due to cost containment strategies and preference for Philippine IT-BPO providers. New work setups continue to emerge, ranging from remote-first to office-first, which could translate to potential net benefits. These include a 10 to 30 percent increase in employee retention; a three- to four-hour reduction in commute times; an increase in enabled talent of 350,000; and a potential reduction in greenhouse gas emissions of 1.4 to 1.5 million tons of CO 2 per year. 28 McKinsey analysis based in input from industry experts. It is becoming increasingly more important that the IT-BPO sector adapts to new technologies as businesses begin to harness automation and generative AI (gen AI) to unlock productivity.

Talent and technology are clear areas where growth in this sector can be unlocked. The growing complexity of offshoring requirements necessitates building a proper talent hub to help bridge employee gaps and better match local talent to employers’ needs. Businesses in the industry could explore developing facilities and digital infrastructure to enable industry expansion outside the metros, especially in future “digital cities” nationwide. Introducing new service areas could capture latent demand from existing clients with evolving needs as well as unserved clients. BPO centers could explore the potential of offering higher-value services by cultivating technology-focused capabilities, such as using gen AI to unlock revenue, deliver sales excellence, and reduce general administrative costs.

Sustainability

The Philippines is considered to be the fourth most vulnerable country to climate change in the world as, due to its geographic location, the country has a higher risk of exposure to natural disasters, such as rising sea levels. 29 “The Philippines has been ranked the fourth most vulnerable country to climate change,” Global Climate Risk Index, January 2021. Approximately $3.2 billion, on average, in economic loss could occur annually because of natural disasters over the next five decades, translating to up to 7 to 8 percent of the country’s nominal GDP. 30 “The Philippines has been ranked the fourth most vulnerable country to climate change,” Global Climate Risk Index, January 2021.

The Philippines could capitalize on five green growth opportunities to operate in global value chains and catalyze growth for the nation:

• Renewable energy: The country could aim to generate 50 percent of its energy from renewables by 2040, building on its high renewable energy potential and the declining cost of producing renewable energy.
• Solar photovoltaic (PV) manufacturing: More than a twofold increase in annual output from 2023 to 2030 could be achieved, enabled by lower production costs.
• Battery production: The Philippines could aim for a $1.5 billion domestic market by 2030, capitalizing on its vast nickel reserves (the second largest globally). 31 “MineSpans,” McKinsey, November 2023.
• Electric mobility: Electric vehicles could account for 15 percent of the country’s vehicle sales by 2030 (from less than 1 percent currently), driven by incentives, local distribution, and charging infrastructure. 32 McKinsey analysis based on input from industry experts.
• Nature-based solutions: The country’s largely untapped total abatement potential could reach up to 200 to 300 metric tons of CO 2 , enabled by its biodiversity and strong demand.

The Philippine economy: Three scenarios for growth

Having grown faster than other economies in Southeast Asia in 2023 to end the year with 5.6 percent growth, the Philippines can expect a similarly healthy growth outlook for 2024. Based on our analysis, there are three potential scenarios for the country’s growth. 33 McKinsey analysis in partnership with Oxford Economics.

Slower growth: The first scenario projects GDP growth of 4.8 percent if there are challenging conditions—such as declining trade and accelerated inflation—which could keep key policy rates high at about 6.5 percent and dampen private consumption, leading to slower long-term growth.

Soft landing: The second scenario projects GDP growth of 5.2 percent if inflation moderates and global conditions turn out to be largely favorable due to a stable investment environment and regional trade demand.

Accelerated growth: In the third scenario, GDP growth is projected to reach 6.1 percent if inflation slows and public policies accommodate aspects such as loosening key policy rates and offering incentive programs to boost productivity.

Focusing on factors that could unlock growth in its seven critical sectors and themes, while adapting to the macro-economic scenario that plays out, would allow the Philippines to materialize its growth potential in 2024 and take steps towards achieving longer-term, sustainable economic growth.

Jon Canto is a partner in McKinsey’s Manila office, where Frauke Renz is an associate partner, and Vicah Villanueva is a consultant.

The authors wish to thank Charlene Chua, Charlie del Rosario, Ryan delos Reyes, Debadrita Dhara, Evelyn C. Fong, Krzysztof Kwiatkowski, Frances Lee, Aaron Ong, and Liane Tan for their contributions to this article.

Explore a career with us

Related articles.

The Philippines Growth Dialogues

What does 2023 hold for the Philippines’ economy?

On the verge of a digital banking revolution in the Philippines