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Functional Strategy - Explained

What is a Functional Strategy?

Written by Jason Gordon

Updated at April 12th, 2023

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What is a Functional Strategy?  

A functional strategy, also known as a “departmental strategy”, concerns each organizational function, and how that organizational unit or division assigned that function will achieve its strategic objectives (a part of the business/competitive strategy). It generally does this by improving or maximizing efficiency and productivity within the functional unit. 

Back to: STRATEGY & PLANNING

Examples of types of functional strategies include:

    •    production strategy,
    •    marketing strategy,
    •    advertisement strategy,
    •    sales strategy,
    •    human resources strategy,
    •    inventory strategy,
    •    financial strategy,
    •    training strategy, etc.

As expected, a functional strategy generally requires the unit and employees to develop specific competencies necessary to provide the business unit with a competitive advantage.
Of course, this will vary with the nature of the function and the specific business unit. As such, each business unit has its own functional strategy.

Related Topics

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  • Inorganic Growth
  • Organic Growth
  • Diversification
  • Concentration
  • Integration or Combination (Horizontal and Vertical)
  • Asset Acquisition Strategy Definition
  • Horizontal Integration - Explained
  • Backward Integration - Explained
  • Internationalization
  • Cooperative Strategy
  • Consortium Definition
  • Stability and Retrenchment Strategies
  • Competitive Strategies
  • Contestable Market Theory
  • Value Disciplines
  • Porter's Generic Strategies
  • Differentiation (Strategy)
  • Commoditize
  • Niche Market Strategy
  • Long Tail
  • Low-Cost Production
  • Resource-Based View of the Firm
  • Resource Dependency Theory
  • Ansoff Matrix
  • Customer-Centric Strategy
  • Blue Ocean Strategy
  • Overfished Ocean Strategy
  • Hedgehog Concept (Strategy)
  • Innovation Strategy
  • Bleeding Edge
  • 3 Horizons of Growth
  • Disintermediation (Strategy)
  • Strategic Alliance
  • Coopetition (Strategy)
  • Loss Leader Strategy
  • Lean Strategy
  • Game Theory Perspectives
  • Functional Strategies
  • Marketing Strategy
  • Zero-Cost Strategy Definition
  • Mobile First Strategy Definition
  • Operational Strategy
functional strategy strategy explained

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