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Functional Strategies Essay

This paper discusses some functional strategies use by an organization’s various functional departments to support the corporate & competitive strategy. The managers play key role in forming these strategies. This also known as operational method to implement the tactics for internal departments. This includes Operation, marketing and finance strategies.


The key strategies for the developments of the organizational capabilities of the business enterprise are Operations, Marketing and Finance. The managers need to balance all three strategies for successful outcome. In Operational strategy the management involves in make or buy analysis. Where as in Marketing strategy the management is busy with their resources and how to allocate these resources with optimum opportunities and achieving sustainable competition. The last in finance, the management is busy making decision on capital structure.

Operational Strategy

Operations function need to participate proactively in the strategic decision process to keep track of the top management’s strategic decisions directions. And this proactive participation is helpful for top management and other functional departments to understand the capability and limitations of operations function. In this respect, operational pro-activeness becomes an effective method to reach the achievement of the strategic alignment between competitive and functional level strategies (Papke-Shields and Malhotra 2001). Relationship with Balance Score care and overheads. The operational strategy do have direct relationship with Balance Score Card (BSC) and Overhead costs allocation. The balanced scorecard (BSC), the levels of use and utilization, the influence of specific features, the most used metrics and features of successful implementation of the BSC. The successful organization must be able to anticipate changes in operating environment and must be able to react faster than the competitors. In the same time maintaining allocation of overheads to control costs are the key elements for the successful operational strategy.

Marketing Strategy

To use an appropriate marketing strategy is a critical element for business success. Choosing an effective strategy requires knowledge of what various alternative marketing strategies exist and understanding how they work under varying environmental and organizational conditions (Shaw, 2012). In the case of existing products and markets the Ansoff suggests a penetration strategy. However, there is no meaningful information provided about how to actually use this strategy to penetrate the market. For example, Ansoff (1957, p. 114) says: Market penetration is an effort to increase company sales without departing from an original product-market strategy. In a similar vein Ansoff (1965, pp. 109-110) states:

Marketing penetration denotes a growth direction through the increase of market share for the present product-market. In the case of new product in the market the Author Dean (1951) suggested the strategy as employing low price and high promotion to rapidly build sales and gain market share. This also a penetration strategy may be used with either new or existing products in either new or existing markets; and as Dean proposed, a penetration strategy involves the aggressive use of a combination of marketing mix elements.

Financial Strategy

Per (Calandro and Flynn 2007) the integrating financial strategy has the power to transform business, as well as the conduct of business in general. In this approach the temporally links critical strategic and financial activities throughout an organization, thus leading to better executive decision-making. This linkage is reinforced through the incorporation of performance measurement into the Financial Strategy framework. The results of this approach include:

a strategy that clearly guides future production; Business decisions that more efficiently allocate scarce resources to execute strategic initiatives; and Measures that effectively and interactively assess performance rather than merely facilitating rewards or punishments.


In today’s business world the success is achieved with all the factors of Operational, Marketing and financial strategies. In fact, just-in-time inventory control, streamlined international operations, and global research and development initiatives are, in many ways, becoming business standards (Calandro and Flynn 2007). Seeking greater levels of efficiency, managers are now beginning to move beyond silos in favor of a more integrated and fluid approach to business. For example, a study conducted by CFO Magazine documented corporate financial practitioners’ desire to play a larger role in strategy formulation. (CFO Magazine, 2004)

Similarly, academicians such as Kaplan and Norton (2004) and Fruhan (1979) have merged strategy and performance measurement in highly innovative and practical ways. This move beyond segregated specialization also exists across the enterprise as the capital markets increasingly look to managers for integrated approaches to competitive initiatives, risk management and communications with stakeholders. Therefore, demand exists for a framework that integrates disciplines such as financial strategy into a more holistic and comprehensive practice (Calandro and Flynn 2007).


Ansoff, H.I. (1957), “Strategies for diversification”, Harvard Business Review, Vol. 35 No.5, pp.113-24. Calandro Jr, Joseph and Flynn, Robert Business Strategy Series, ISSN 1751-5637, 2007, Volume 8, Issue 6, pp. 409 – 417 CFO Magazine (2004), “Finance seeks a seat at the strategy table – a report prepared by CFO Research Services in collaboration with Geac”, available at: www.cfo.com, Dean, J. (1951), Managerial Economics, Prentice Hall, Englewood Cliffs, NJ, . Fruhan, W.E. (1979), Financial Strategy – Studies In The Creation, Transfer, and Destruction of Shareholder Value, Irwin, Homewood, IL, . Haapasalo, Harri; Ingalsuo, Kari and Lenkkeri, Timo, “Benchmarking: An International Journal”, ISSN 1463-5771, 2006, Volume 13, Issue 6, pp. 701 – 717 Kaplan, R.S., Norton, D.P. (2004), “Strategic management: an emerging profession”, Balanced Scorecard Report, Vol. May/June pp.4-7. Papke-Shields, K. E. and M. K. Malhotra (2001),
“Assessing impact of the manufacturing executive’s role on business performance through strategic alignment”, Journal of Operations Management, Vol.19, pp.5- 22. Shaw, Erick H Journal of Historical Research in Marketing, ISSN 1755-750X, 2012, Volume 4, Issue 1, pp. 30 – 55 Xxx

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