What is Business Level Strategy and Why is it Important?

Ayaan Bhattacharjee

Senior Writer:

green tickReading Time: 11 Minutes
green tickPublished : March 1, 2023

Success in today’s quickly changing business climate depends on solid business strategy. A company’s strategy for securing a competitive edge in a particular market sector is called its business level strategy.

It entails strategic decisions about target market choice, pricing, and product differentiation. An effective business strategy can give organizations a competitive advantage and boost profitability. 

This blog will discuss the significance of business-level strategy, its essential elements, and how firms may develop successful plans to succeed in their particular industries.

What is Business Level Strategy?

business level strategies Source

A company’s business level strategy is the collection of steps to position itself inside a specific market about its rivals. Focusing on how a company will compete in its chosen markets to attain its business goals is a significant component of overall corporate strategy. Choices about product offerings, pricing, marketing plans, and distribution networks must be taken at the corporate level to get a competitive edge in the market.

Why is Business Level Strategy Important? 

Why is Business Level Strategy Important? source

The importance of business level strategy are are follows.

1. Competitive edge

It provides a business a chance to get a competitive edge in the marketplace. A business may make informed judgments regarding its products, price, marketing, and distribution channels to differentiate itself from the competition by acquiring a thorough grasp of the market and its competitors. Increased sales operations, market share, and profitability may follow from this.

2. Alignment with goals

A company can better match its resources and skills with its business goals with business strategy. By focusing on a particular market segment and choosing the best strategy to compete, a company can use its resources and competencies to maximize its chances of success. This may lead to more profitable operations, lower costs and more effective operations.

3. Clear understanding of the objectives

Business strategy gives the company a competitive advantage for a clear direction and makes it easier for employees, clients, and other stakeholders to understand that direction. A business may ensure that everyone understands its objectives and how it intends to achieve them by clearly expressing its business level strategy. 

As a result, there may be an increase in stakeholder support, stronger customer loyalty, and a more motivated and focused workforce.

Therefore, business strategy is a crucial component of overall corporate strategy because it give a competitive advantage to a company to establish its position in the market.

Difference Between Corporate Level And Business Level Strategy

A corporation may choose to think a successful business level strategy vs corporate level strategy to accomplish its goals. Corporate level strategy is focused on the overall direction and scope of the corporation, whereas business strategy is focused on how the organization competes in a specific market. 

Another strategy is functional level strategy, which focuses on how a company’s numerous functions might aid in achieving its overall corporate and business level strategies. 

1. Corporate-Level strategy

Corporate level strategies are concerned with a company’s overall focus and direction. To maximize overall performance, judgments must be made regarding which firms to enter, which to exit, and how to manage the portfolio of enterprises. Corporate level strategy’s primary objective is to increase the company’s overall performance to maximize value for shareholders.

Corporate-level strategies can take various forms, including diversification, vertical integration, and geographic expansion. Entering new markets or industries unrelated to the company’s current businesses is part of a diversification strategy. 

2. Business-Level Strategy

The business strategy focuses on a company’s ability to compete in a particular market or industry. It entails choices regarding how to position the company’s goods or services compared to its rivals and how to forge a lasting competitive advantage by attaining customer satisfaction. 

Several types of business level strategies exist, such as cost leadership, differentiation, and focus. With a cost leadership strategy, a company can sell items at a lower cost than its rivals by obtaining the lowest manufacturing and delivery cost in the sector. 

3. Functional-Level Strategy

The focus of functional level strategies are how a company’s numerous departments, including marketing, finance, and operation strategies, can support its overall business and corporate level plans. To accomplish the firm’s goals, decisions must be made about how to distribute resources and coordinate actions across various functions. The main goal of the functional level strategy is to maximize the efficacy and efficiency of the company’s multiple operations.

Three Types of Business-Level Strategies

Cost leadership, differentiation, and focus are the three types of business-level strategies. Each strategy aims to gain a competitive advantage and increase profitability in a specific market segment. Let’s try to know each one of them in detail.

1. Cost Leadership Strategy

With a broad cost leadership strategy, a company can sell items at a lower cost than its rivals by obtaining the lowest manufacturing and delivery cost in the sector. This tactic is predicated on the idea that, given a choice, buyers will select the least expensive good that satisfies their requirements. 

The cost leaders must strongly emphasize cost reduction in all areas of its operations, from procuring raw materials to providing completed goods to clients, to adopt a cost leadership strategy.

A cost leadership strategy’s major benefits are enabling a business to compete on a lower price and realize economies of scale. 

2. Differentiation Strategy

Offering distinctive goods or services that clients value and are challenging for rivals to replicate is part of the differentiation strategy.

This marketing tactic is predicated on consumers paying more for goods with better quality, design, features, or customer service. A business must focus on developing products that are viewed as superior to those of its rivals in one or more respects to undertake a differentiation strategy.

Two of the main advantages of a corporation utilizing a differentiation strategy are the capacity to demand a premium price and promote brand loyalty. 

3. Focus Strategy

The focus approach is serving a particular market sector or niche that competitors underserve. This strategy is based on the notion that a company can increase profitability by concentrating on a certain market segment and tailoring its products or services to that group’s distinct needs and preferences. 

To adopt a focus strategy, a business must concentrate on comprehending the distinct wants and preferences of the target market and creating goods or services that better satisfy those demands than rivals. A corporation can compete in a smaller market with less competition and more profitability using a focus strategy. 

A corporation can therefore utilize both corporate level strategy and business level strategy, which are two separate sorts of strategies, to achieve its goals. Corporate level strategy is focused on the overall direction and scope of the company, whereas business level strategy is oriented on how the organization competes in a specific market.

How To Implement a Business-Level Strategy?

 Implement a Business-Level Strategysource

A company’s activities and choices to accomplish its goals and obtain a competitive edge in the market are called its business-level strategy. Any business that wants to expand and prosper in its industry must implement an effective business-level strategy. 

Thus, the business level strategies are concerned specifically with the following factors –

1. Identify the target market and consumers 

The first stage in implementing a business-level plan is to determine the company’s target customers. In order to comprehend the demands and preferences of the target audience, market research is necessary.

Surveys, focus groups, or the examination of consumer comments can all be used for market research. The business should examine its rivals to see what they are doing successfully and where they fall short. This data can be utilized to distinguish the company’s goods and services and develop a distinctive value proposition.

After identifying the target customers and market, the business must ascertain its competitive advantage. This entails assessing the company’s advantages and disadvantages in relation to the competition. 

With SWOT analysis, the company may assess its competitive position (Strengths, Weaknesses, Opportunities, and Threats). Based on this study, the business can identify its distinctive selling propositions and develop a strategy that builds on its advantages while resolving its disadvantages.

2. Find out their needs

Market research is one technique to learn what your customers require. Using the collected data, you can find trends in your customers’ tastes and behavior. You can use this knowledge to create goods and services satisfying their wants and preferences.

Analyzing your customers’ online behavior is another technique to learn about their wants. They can learn more about their interests, browsing patterns, and purchasing behaviors by using social media and web analytics. You may use this information to construct tailored marketing campaigns and modify your content to meet their needs and interests.

3. Discuss how to cater to their needs 

Offering goods and services that suit your consumers’ tastes and offering first-rate customer care are essential if you want to satisfy their needs. Providing a tailored experience that will make them feel important and cherished is possible.

Building brand loyalty can be facilitated by providing incentives and promotions that speak to their interests. Your ability to keep clients happy and devoted depends on your willingness to actively listen to their opinions and improve your products and services.

Offering flexible payment and delivery choices and simple access to information and support may also improve the client experience and better serve their needs.

4. Make comparisons to competitor strategies 

Understanding your own strategy and evaluating your competitors’ strategies are crucial for company success. You can find areas for your strategy’s improvement and distinctiveness by making comparisons. In this post, we’ll go over how to evaluate the strategies of rival companies and establish attainable targets for the entire organization.

Finding your direct and indirect rivals before comparing your techniques to theirs is crucial. Afterwards, you may examine their advertising campaigns, product lines, and price plans to learn how companies are positioned in the industry.

Also, you can investigate their advantages and disadvantages and contrast them with your own. You can use this information to find ways to distinguish your goods or services and develop a distinctive selling proposition.

5. Set common goals to be met by the company as a whole 

Setting shared objectives for the organization is vital once you have studied your rivals’ strategies. These objectives align with the organization’s mission and vision and take into consideration the learnings from the study of the rivals.

You can make sure that each member of the company is working toward the same objectives and that assets are being used effectively by setting shared objectives.

6. Set unique department goals

Setting distinct departmental goals that align with the corporate objectives is crucial for success. Each department should have clear goals supporting the business’s mission and vision.

These objectives must to have concrete timetables, measurable objectives, and success indicators. Make sure that each department is focused on its particular responsibilities and is advancing the organization’s broader goals by establishing distinct department goals.

7. Complete routine checks at each company level

It’s crucial to carry out routine inspections at every level of the business to ensure everything operates smoothly and effectively. These inspections may consist of performance assessments, process audits, and financial audits.

By conducting frequent checks, you can identify areas that want improvement and make sure that assets are being used effectively. These inspections can help reduce risk and ensure that the law is being followed. You may maintain a high quality level and ensure the business is accomplishing its goals by carrying out routine checks at each level of the organization.

5 Business Level Strategy Examples


Business level strategy examples include companies that focus on providing the lowest-cost products or services, offering unique and differentiated products, and concentrating on serving a specific niche market.

These strategies can lead to competitive advantage and increase profitability, helping businesses succeed in their respective industries. The various types of business level strategies example are:-

1. Cost Leadership (Wallmart)


Cost leadership is a business strategy that tries to create and sell products and services for less money than competitors while maintaining a similar level of quality. This focused cost leadership is excellent for businesses that compete in price-sensitive or low cost areas with fierce competition.

Companies can provide their products at reduced rates by focused differentiation strategy, boosting their market share and profitability.

Walmart is a fantastic illustration of a business that has effectively applied the cost leadership strategy. One of the biggest retailers in the world, Walmart has dominated the retail sector thanks to its low-cost business model.

Because Walmart’s supply chain and inventory management systems are built on focused cost leadership strategy to cut costs wherever possible, the company is able to provide goods at competitive pricing. Walmart has garnered a sizable client base by maintaining low expenses and providing low prices, aiding the company’s rapid expansion.

2. Differentiation (Apple)


Offering distinctive goods or services that customers value is a key component of the business strategy known as differentiation. This marketing approach is appropriate for businesses in marketplaces where consumers are willing to pay more for superior goods and services. Companies can gain a competitive edge and boost profitability by providing distinctive goods or services.

Apple is one business that has effectively applied the differentiation strategy. Apple is renowned for its distinctive and cutting-edge goods, including the iPhone, iPad, and MacBook.

Because Apple products stand apart from its rivals, the company has been able to develop a strong brand and devoted following of customers. The strong profitability of Apple can be attributed to the company’s ability to charge premium prices for its products thanks to its differentiation strategy.

3. Integrated Low-Cost Differentiation (Toyota)


Cost leadership and differentiation are combined in the integrated low-cost differentiation approach. In order to preserve a competitive edge, this strategy requires creating and marketing distinctive goods or services while keeping prices low. Companies that do business in markets where consumers are price-sensitive and prepared to pay more for high-quality goods could use this technique.

Toyota is an illustration of a business that has effectively used this tactic. Toyota automobiles are renowned for their excellent craftsmanship, dependability, and affordability. The company’s production process is set up to produce high-quality vehicles at the lowest possible cost. One of the most prosperous car businesses in the world, Toyota has achieved cost leadership and distinction.

4. Focused Differentiation (Rolex)


Targeting a certain market niche and providing exclusive goods or services to that segment are examples of focused differentiation. Companies that do business in marketplaces where consumers have particular demands or preferences should use this method. By concentrating on a certain market niche, businesses can create distinctive goods or services that address the needs of the niche, which may boost client loyalty and profitability.

Rolex is an illustration of a business that has effectively used this tactic. High-end luxury timepieces by Rolex are well-known among wealthy buyers seeking exclusivity and excellence. Rolex has built a strong brand and customer loyalty by focusing on a specific market segment and offering unique products.

5. Focused Low-Cost (Southwest Airlines)


Focused low-cost strategy entails focusing on a particular market sector and providing goods and services at a lower price than rivals while keeping a comparable level of quality. Companies in highly competitive marketplaces with price-sensitive consumers should use this method.

Southwest Airlines is one instance of a business that has successfully used this tactic. Southwest Airlines is renowned for providing customers in particular markets with affordable airfares. The business specializes in short-haul travel and offers its customers a straightforward flying experience.

Southwest Airlines has a big client base because of its ability to offer inexpensive prices to customers by maintaining low costs. The company’s focused low-cost strategy has made it one of the most successful airlines in the United States.


Any organization that wants to succeed in today’s cutthroat business world must have a solid business plan. Businesses can boost profitability, expand their market share, and acquire a competitive advantage by deciding on the best approach. It’s critical to realize that there is no one-size-fits-all method to developing an effective business level plan.

Each organization must evaluate its specific resources, competencies, and target market to select the best strategy. Businesses can position themselves for long-term success and keep one step ahead of the competition by investing in a solid business level strategy. Thus, if you like our blog, let us know by commenting below so that we can bring you more such information.

Business level strategy FAQ's

Business level strategy is focused on a company's ability to compete in a certain market or industry. It entails choosing how the business will set itself apart from its rivals and gain a competitive edge. Making decisions about product design, marketing and distribution, and pricing strategies are all part of business level strategy, which is often handled at an organization's divisional or business unit level.

The business level strategy of the firm motive is giving it a competitive edge in its particular market or industry. A business can build out a particular niche and enhance its market share by standing out from competitors. Company level strategy can assist businesses in boosting their long-term profitability and viability.

A detailed awareness of the company's target market, familiarity with the competition, and an evaluation of the company's resources and skills are among the most crucial factors in developing a business level strategy. Also, businesses must consider how the business level plan ties into the larger organizational strategy and their ultimate goals and objectives.

Business-level strategies often concentrate on giving the organization a competitive edge within a particular market or industry. They typically entail making decisions regarding product design, marketing and distribution, and price strategies based on a particular good or service. Business-level strategies are frequently executed at an organization's divisional or business unit level to accomplish specific business goals and objectives.

As its business level strategy, Starbucks leverages distinction. The business sets itself apart by providing high-quality coffee and a distinctive customer experience. Starbucks prioritizes the quality of its goods and customer support, which has helped the business build a strong brand and win over repeat business.

The organization's strategic choices regarding how it will compete in a particular market or industry are reflected in the business level strategy. These decisions are often made at an organization's divisional or business unit level and involve options for product design, marketing and distribution, and price strategies.

By providing goods or services at a lower price than rivals, a cost advantage business level strategy aims to get a competitive edge. This can be done in many ways, including streamlining the production process, cutting back on overhead expenses, or introducing cost-effective technologies.

The organization's strategic choices regarding how it will compete in a particular market or industry are reflected in the business level strategy. These decisions are often made at an organization's divisional or business unit level and involve options for product design, marketing and distribution, and price strategies.

Business level strategies' performance depends on several variables, including the company's capacity to distinguish itself from rivals, its comprehension of the target market and customers, and its capacity to implement the strategy successfully.

Updated : March 15, 2023

subscribe image
Let’s Stay in Touch

Subscribe to our newsletter & never miss our latest news and promotions.

people subscribed +21K people have already subscribed
Share This