Functional Strategy And Organization Methods
Functional Strategy
Function level strategy is concerned with how each individual functional area is organized to deliver and contribute to the business strategy, what their strategic objectives should be, and guide how they should manage their resources in pursuit of those objectives. Functional level strategy advocates for the business to see its management decisions as specific to a functional area of the organization such as marketing, human resources, finance, public relations, etc. The management of functional areas seeks answers to the following questions in order to help formulate function strategy for particular functional areas;
Function strategy operates at a level of functional areas such as marketing, finance, human resources, etc., and refers to the set of organizational methods/actions taken in those parts of the business organization to support the company's overall business and competitive strategy. Functional strategies help in implementation of strategic choices and grand strategy by organizing and activating specific sub-units of the organization to pursue the business strategy in daily activities. Each functional area, or structural unit i.e., department, division, etc., will have its own set of needs; and the company must determine how to allocate resources to meet these needs.
Functional strategy refers to the set of strategic initiatives taken in one part of a business to improve capacity development. Functional Strategy, for any business, large or small, focuses the achievement of a goal on the skills and abilities of individual functional areas/departments and their employees. Functional goals are elaborations of the Organizational Operative Goals, and they outline a target skill to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
Function level strategy is concerned with how each individual functional area is organized to deliver and contribute to the business strategy, what their strategic objectives should be, and guide how they should manage their resources in pursuit of those objectives. Functional level strategy advocates for the business to see its management decisions as specific to a functional area of the organization such as marketing, human resources, finance, public relations, etc. The management of functional areas seeks answers to the following questions in order to help formulate function strategy for particular functional areas;
- How does the function contribute to the business strategy?
- What are the strategic objectives of the function?
- How are resources managed in the function?
- What technology do we use in the function?
- What skills are required by workers in the function?
Function strategy operates at a level of functional areas such as marketing, finance, human resources, etc., and refers to the set of organizational methods/actions taken in those parts of the business organization to support the company's overall business and competitive strategy. Functional strategies help in implementation of strategic choices and grand strategy by organizing and activating specific sub-units of the organization to pursue the business strategy in daily activities. Each functional area, or structural unit i.e., department, division, etc., will have its own set of needs; and the company must determine how to allocate resources to meet these needs.
Functional strategy refers to the set of strategic initiatives taken in one part of a business to improve capacity development. Functional Strategy, for any business, large or small, focuses the achievement of a goal on the skills and abilities of individual functional areas/departments and their employees. Functional goals are elaborations of the Organizational Operative Goals, and they outline a target skill to be acquired in measurable terms, while including precise behavior to be accomplished and a specific criterion defined by the objective for measuring performance.
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Marketing Function and Strategy
Marketing is a function in a company and its role within the company is to identify and source potentially successful products/services for the marketplace the company operates in and then promote them by differentiating them from similar products. Marketing involves the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Marketing provides the means to persuade, influence and motivate a targeted audience and generate visibility. Marketing is primarily concerned with two things:
Typical marketing function types within a business might include performing tasks such as: market research, producing a marketing plan, product development, as well as strategically overseeing advertising, promotion, distribution for sale, customer service and public relations, sales and communications. Marketing management process involves planning and executing marketing strategy - the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing Management
Marketing management is concerned with the development of policies that ensure effective implementation of marketing strategy. Marketing policies ensure for example, that every part of the organization is on board and promoting the organization in a consistent manner. A consistent image is what makes people remember a company. The strategic management aspects of marketing consists of four (4) areas of strategic considerations -
These considerations can be framed in terms of questions to guide answers to issues that help frame strategic decisions in marketing and marketing strategy.
Products and Services Issues
These are issues related to the goods and services the organization offers to its customers.
Place Issues
This component identifies where, when, and by whom the product/services are to be offered for sale. These questions guides answers to strategic marketing decisions regarding channels to ensure consistency with the total marketing effort.
Pricing Issues
Promotion Issues
Promotion refers to the methods used to put products and services in the public eye. Promotion strategy should provide marketing managers with basic guides for the use and mix of advertising, personal selling, sales promotion, and media selection.
Marketing Strategy
Marketing strategy deals with product mix (product/service choices and features offered to customers), pricing, markets positioning, distribution, and promotion considerations. The marketing strategy is characterized by the decisions the company needs to make so the marketing tactics and actions work better, and toward achieving the marketing objectives. These decisions define keys to your particular and selected marketing strategy and are informed by the choice of answers to questions such as:
Providing simple, single answer to each of the above questions ensures focus; and committing not to change these for a period of a year or two make your tactics work better. A typical marketing strategy is to determine the needs in an area where the company has a natural competing advantage as defined by the business strategy. Such advantages might be in location, facilities, reputation, or staffing; and marketing strategy is concerned with matching existing or potential products and services with the needs of customers.
Marketing strategy at the functional level influences the other functions and their strategies, and forms the basis for the strategies of these other departments and functions. These Non-Marketing Function Level strategies are derived from Operations Strategy and/or Marketing Strategy; and they must support the marketing strategy that in turn, is a component of the overall business strategy.
Examples of Strategies
The marketing strategy selected by an organization is dependent on whether the organization is attempting to reach new or existing customers, and whether its products and services are new or already exist. The selected may be a one of the following generic strategies:
A selected strategy would in addition have marketing mix options associated; these may include pricing strategy options, positioning/place strategy options, and promotion strategy options. Some examples of market mix options may include:
Formulating Marketing Strategy
A Marketing Strategy, for any business, large or small, focuses the achievement of a goal on the skills and abilities of individual marketing departments and their employees. Marketing strategies are defined in terms of the specification of intended outcomes, expressed in terms of marketing objectives and goals. Marketing level strategic goals state "what" is to be achieved in a marketing functional area and "when" results are to be accomplished. Marketing strategy is defined by a plan of action for identifying and analyzing a target market, and developing a marketing mix to meet the needs of that market. The objectives state through outcomes "where" the company intends to be at some specific time in the future. One of the primary goals of marketing strategy is to establish customer loyalty and to reach out to new markets.
Marketing Goals and Objectives
Marketing goals and objectives are created by managers in marketing to guide the work of employees in the marketing department. Managers review the total company goals and identify ways that the marketing department can support those company goals. Each supporting action represents a goal for the department to continue and improve on. Marketing objectives identify specific actions that marketing employees can perform; each objective providing a method of achieving the company's goals.
Marketing Goals
Marketing goals are statements of what results you want to achieve with your marketing. What's the primary reason you are marketing? Marketing goals should fit into and support your overall business goals. A marketing goal can be a number, such as a certain year-end revenue figure; it might be a number such as four new clients per month. Marketing goals can also be quantitative translations that fit with your company's financial objectives, stated in marketing terms such as to increase:
The goals are the building blocks of your marketing plan, the starting point of the plan. For any given company's situation not all these goals will be relevant, a subset of these goals will be part of the marketing plan. The right number of goals is the one that offers reasonably high probability of success over a given period of time. "Reasonably", "period of time", and "success" all have to defined by the company, and should be consistent with the overall business goals and management commitment.
Marketing Objectives
Marketing objectives are goals set by a business when promoting its products or services to potential consumers that should be achieved within a given time frame. In other words, marketing objectives are the marketing strategy set in order to achieve the overall organizational objectives. Typical marketing objectives may include:
Marketing objectives are short-term achievements to help you accomplish longer-term goals. They should be set on a weekly or monthly time line. These objectives help a business set out what a business wants to achieve from its marketing strategy.
Marketing Plan
The purpose of the marketing plan is to describe who your clients are and where they are, and how you can reach them. The marketing plan helps you outline your marketing goals and objectives and help your company understand how to get there. A Marketing Plan consists of several key pieces of information which can be divided into sections based on the organizations preference. The marketing plan goes into the logistical details of executing your strategy such as budgets, more detail time scales for objectives and goals, who in the organization will manage the various points in the strategy, the logistics of various distribution channels and their incumbent costs. etc. The marketing plan is vital for small businesses; it help small businesses leverage their resources and audience for maximum impact at minimum cost.
The marketing plan is a more lively document than your strategy, and will need to be updated more frequently and adjusted to accommodate changes in costings, market conditions, economic conditions and other factors. Monitor the results of marketing activity, and be ready to adapt both your strategy and plan.
Marketing is a function in a company and its role within the company is to identify and source potentially successful products/services for the marketplace the company operates in and then promote them by differentiating them from similar products. Marketing involves the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Marketing provides the means to persuade, influence and motivate a targeted audience and generate visibility. Marketing is primarily concerned with two things:
- The creation of a customer
- The delivery of value to that customer
Typical marketing function types within a business might include performing tasks such as: market research, producing a marketing plan, product development, as well as strategically overseeing advertising, promotion, distribution for sale, customer service and public relations, sales and communications. Marketing management process involves planning and executing marketing strategy - the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing Management
Marketing management is concerned with the development of policies that ensure effective implementation of marketing strategy. Marketing policies ensure for example, that every part of the organization is on board and promoting the organization in a consistent manner. A consistent image is what makes people remember a company. The strategic management aspects of marketing consists of four (4) areas of strategic considerations -
- Products - These are the goods and services offered to customers in selected markets.
- Pricing - Provides the means to capture value
- Place - Channels of Distribution (or Location Outlets); these define the places where, when and by whom the products and services are delivered to customers.
- Promotion - This includes all the activities which are undertaken to communicate with the customer and increase the sale. Promotion functions include advertising, sales promotion, personal selling, publicity, etc.
These considerations can be framed in terms of questions to guide answers to issues that help frame strategic decisions in marketing and marketing strategy.
Products and Services Issues
These are issues related to the goods and services the organization offers to its customers.
- What does the customer want from the product/service? What needs does it satisfy?
- What features does it have to satisfy these needs? Are there any features we are missing? Are you including costly features that the customer won't actually use?
- How and where will the customer use it?
- What does it look like? How will customers experience it?
- What size(s), color(s), etc., should it be?
- What is it to be called?
- How is it branded?
- How is it differentiated versus our competitors?
- What is the most it can cost to provide and still be sold sufficiently profitably?
Place Issues
This component identifies where, when, and by whom the product/services are to be offered for sale. These questions guides answers to strategic marketing decisions regarding channels to ensure consistency with the total marketing effort.
- Where do buyers look for your product or service?
- If they look in a store, what kind? A specialist boutique or in a supernarket, or both? Or online? Or direct, via catalog?
- How can you access the right distribution channels?
- Do you need to use sales force? Or attend trade fairs? Or make online submissions? or send samples to catalog companies?
- What do your competitors do, and how can you learn from that and/or differentiate?
Pricing Issues
- What is the value of the product or service to the buyer?
- Are there established price points for products and services in this area?
- Is the customer price sensitive?What discounts should be offered to trade customers, or to other specific segments of your market?
- How will your price compare with your competitors?
Promotion Issues
Promotion refers to the methods used to put products and services in the public eye. Promotion strategy should provide marketing managers with basic guides for the use and mix of advertising, personal selling, sales promotion, and media selection.
- Where and when can you get your marketing messages across to your target market?
- Will you reach your audience by advertising online, in the press, on TV, on radio, or on billboards? By using direct marketing mailshots? Through PR? On the internet?
- When is the best time to promote?
- How do your competitors do their promotions? And how does that influence your choice of promotional activity?
Marketing Strategy
Marketing strategy deals with product mix (product/service choices and features offered to customers), pricing, markets positioning, distribution, and promotion considerations. The marketing strategy is characterized by the decisions the company needs to make so the marketing tactics and actions work better, and toward achieving the marketing objectives. These decisions define keys to your particular and selected marketing strategy and are informed by the choice of answers to questions such as:
- Who is your narrowly defined target customer?
- What are you selling to them?
- Where are they looking for your product or service?
- In which category does your business exist?
- What is your unique benefit?
- Who is your real competition?
- How are you clearly different from your competition?
Providing simple, single answer to each of the above questions ensures focus; and committing not to change these for a period of a year or two make your tactics work better. A typical marketing strategy is to determine the needs in an area where the company has a natural competing advantage as defined by the business strategy. Such advantages might be in location, facilities, reputation, or staffing; and marketing strategy is concerned with matching existing or potential products and services with the needs of customers.
Marketing strategy at the functional level influences the other functions and their strategies, and forms the basis for the strategies of these other departments and functions. These Non-Marketing Function Level strategies are derived from Operations Strategy and/or Marketing Strategy; and they must support the marketing strategy that in turn, is a component of the overall business strategy.
Examples of Strategies
The marketing strategy selected by an organization is dependent on whether the organization is attempting to reach new or existing customers, and whether its products and services are new or already exist. The selected may be a one of the following generic strategies:
- Marketing Penetration - The firm attempts to gain greater control in a market in which it already has a product or services.
- Market Development - Introducing the firm's existing products or services to customers other than the ones it currently serves.
- Product Development - Creates a new product or service for existing customers.
- Diversification - Offering new products to new customers.
A selected strategy would in addition have marketing mix options associated; these may include pricing strategy options, positioning/place strategy options, and promotion strategy options. Some examples of market mix options may include:
- Outbound Marketing -
- Inbound Marketing -
- Blogging and Content Marketing
- Search Engine Optimization -
- Email Marketing and News Letters
- Visual Marketing
- Brand Awareness
- Media Attention -
- Press Releases -
- Guerrilla Marketing -
- eBooks and Content Marketing -
- Paid Search Advertising
- Direct Mail campaigns -
- Cold Calling and Cold Emailing -
Formulating Marketing Strategy
A Marketing Strategy, for any business, large or small, focuses the achievement of a goal on the skills and abilities of individual marketing departments and their employees. Marketing strategies are defined in terms of the specification of intended outcomes, expressed in terms of marketing objectives and goals. Marketing level strategic goals state "what" is to be achieved in a marketing functional area and "when" results are to be accomplished. Marketing strategy is defined by a plan of action for identifying and analyzing a target market, and developing a marketing mix to meet the needs of that market. The objectives state through outcomes "where" the company intends to be at some specific time in the future. One of the primary goals of marketing strategy is to establish customer loyalty and to reach out to new markets.
Marketing Goals and Objectives
Marketing goals and objectives are created by managers in marketing to guide the work of employees in the marketing department. Managers review the total company goals and identify ways that the marketing department can support those company goals. Each supporting action represents a goal for the department to continue and improve on. Marketing objectives identify specific actions that marketing employees can perform; each objective providing a method of achieving the company's goals.
Marketing Goals
Marketing goals are statements of what results you want to achieve with your marketing. What's the primary reason you are marketing? Marketing goals should fit into and support your overall business goals. A marketing goal can be a number, such as a certain year-end revenue figure; it might be a number such as four new clients per month. Marketing goals can also be quantitative translations that fit with your company's financial objectives, stated in marketing terms such as to increase:
- Sales dollars
- Units sold
- Market share
- Mix of products or services offered
- ROI on advertising expenditures
- Awareness/visibility
- Public relations placements
- Number of new accounts/relationships
- Share of customer's business
- Sales conversion rates
The goals are the building blocks of your marketing plan, the starting point of the plan. For any given company's situation not all these goals will be relevant, a subset of these goals will be part of the marketing plan. The right number of goals is the one that offers reasonably high probability of success over a given period of time. "Reasonably", "period of time", and "success" all have to defined by the company, and should be consistent with the overall business goals and management commitment.
Marketing Objectives
Marketing objectives are goals set by a business when promoting its products or services to potential consumers that should be achieved within a given time frame. In other words, marketing objectives are the marketing strategy set in order to achieve the overall organizational objectives. Typical marketing objectives may include:
- Increase Sales - "To increase sales by 50% within 12 months"
- Build Brand Awareness - Achieve 75% customer awareness of our brand in our target markets.
- Grow Market Share - Achieve market share of 10%
- Launch new products or services
- Target new customers
- Enter new markets internationally, or locally
- Improve shareholder relations
- Enhance customer relationships
- Improve internal communications - "To increase the number of enquires from our marketing communications activities by 20% by the end of the month"
- Increase profits
Marketing objectives are short-term achievements to help you accomplish longer-term goals. They should be set on a weekly or monthly time line. These objectives help a business set out what a business wants to achieve from its marketing strategy.
Marketing Plan
The purpose of the marketing plan is to describe who your clients are and where they are, and how you can reach them. The marketing plan helps you outline your marketing goals and objectives and help your company understand how to get there. A Marketing Plan consists of several key pieces of information which can be divided into sections based on the organizations preference. The marketing plan goes into the logistical details of executing your strategy such as budgets, more detail time scales for objectives and goals, who in the organization will manage the various points in the strategy, the logistics of various distribution channels and their incumbent costs. etc. The marketing plan is vital for small businesses; it help small businesses leverage their resources and audience for maximum impact at minimum cost.
The marketing plan is a more lively document than your strategy, and will need to be updated more frequently and adjusted to accommodate changes in costings, market conditions, economic conditions and other factors. Monitor the results of marketing activity, and be ready to adapt both your strategy and plan.
Human Resources Function and Strategies
The Human Resources function in an organization involves the management of employees in an effective and efficient manner to attain the organizational goals through planning, organizing directing, and controlling organizational human resources. The human resources function and departments of a company has the task of ensuring that the company has the best and effective workforce possible to achieve the mission. The Human Resources function is focused on the management of employees with job responsibilities that include recruiting new employees, training those employees, and helping with conflict resolution.
Human Resources Management
HR Management involve processes for hiring, firing, training, and motivating employees as well as administrative services, job analysis, employee relations, etc. The human resources management tasks and key results areas may include:
HR Management concerns
Human resources management concerns include:
Human Resource Function
The human resource department plays a vital role when it comes to the overall employee satisfaction and their well-being. The human resources function must have a finger on the pulse at all times when it comes to the company's goals and objectives. The function must be able to constantly look at new ways to keep the employees happy, motivated and productive (on the right track).
Human Resource Management Function Goals and Objectives
The goal of HR strategy is to establish the number of employees needed by an organization to carry out their mission, their skills sets and levels, effective training needs, and compensation and rewards systems. Human resource goals and objectives focus on recognition of human capital as the resource that drives organizational success.
Human Resource Management Goals
The key function goals include:
Human Resource Management Objectives
Human Resource Management objectives ...
Employee Goals
[TBD]
Human Resource Function Strategy
There are very many different types of HR strategy but at their heart, they all start with the same foundation; to create a work environment that's synonymous with engaged, productive and loyal staff (employees and contract workers). Human Resources function strategy deals with decisions on:
Every organization is different and will be staffed by employees from different backgrounds, sectors, and with different goals and ambitions, values, beliefs, etc. The key to a successful HR strategy is to identify what unifies and motivates your employees, and to develop a strategic plan around that understanding. The following are examples of tools available to HR departments when developing their strategies and plans;
Management should consider conducting regular surveys to determine what the employees value, and what motivates them,
The Human Resources function in an organization involves the management of employees in an effective and efficient manner to attain the organizational goals through planning, organizing directing, and controlling organizational human resources. The human resources function and departments of a company has the task of ensuring that the company has the best and effective workforce possible to achieve the mission. The Human Resources function is focused on the management of employees with job responsibilities that include recruiting new employees, training those employees, and helping with conflict resolution.
Human Resources Management
HR Management involve processes for hiring, firing, training, and motivating employees as well as administrative services, job analysis, employee relations, etc. The human resources management tasks and key results areas may include:
- HR Planning - Involves assessing HR capacity, forecasting future requirements, identifying gaps and integrating the plan with the organization's strategy.
- HR Policies and Procedures (Administration Services)
- Recruiting and Selection
- Benefits Administration
- Training and Development (Talent Management)
- Disciplining
- Employee Relations
HR Management concerns
Human resources management concerns include:
- Recruiting right people with the right skills, and retaining them
- Creating a competent workforce.
- Developing people and creating a committed workforce.
- Cost effectiveness
- Compensation
Human Resource Function
The human resource department plays a vital role when it comes to the overall employee satisfaction and their well-being. The human resources function must have a finger on the pulse at all times when it comes to the company's goals and objectives. The function must be able to constantly look at new ways to keep the employees happy, motivated and productive (on the right track).
Human Resource Management Function Goals and Objectives
The goal of HR strategy is to establish the number of employees needed by an organization to carry out their mission, their skills sets and levels, effective training needs, and compensation and rewards systems. Human resource goals and objectives focus on recognition of human capital as the resource that drives organizational success.
Human Resource Management Goals
The key function goals include:
- Achieving consistent employee engagement in the workforce -[Employee Engagement]
- Creating a safe environment that is supportive of productive relationships by aligning company policies with federal, state, and city employment laws - [Compliance Targets]
- Improved Recruiting - Providing the organization with well trained and motivated employees. - [Improved Staffing]
- Improved Retention - Reduce employee turnover or increase employee retention - [Improved Staffing].
- Increased employee satisfaction - To be employer of choice; employees are happy to be part of the company for which others want to work - [Employer of Choice]
- Improved Labor Cost Management - Ensuring effective utilization and maximum development of human resources - [Improved Staffing].
- Achieving and maintaining high morale among employees.
- Enhancing employee capabilities to perform the present job.
- Inculcating a sense of team spirit, teamwork and inter-team collaboration.
- Open and Honest Communication
- Open and Friendly Management style
- Organize leadership development courses for managers and employees
- Managers and employees tasked to define target organizational culture
- Design and development of corporate culture
Human Resource Management Objectives
Human Resource Management objectives ...
- Creating the right match between employee skills and job assignments- [Goal #1: Employee Engagement]
- Coordinating promotional opportunities and workforce capabilities - [Goal #1: Employee Engagement]
- Regular employment file audits to assess equity of compensation practices - [Goal #2: Compliance Targets]
- Regular employment file audits to assess workforce diversity practices - [Goal #2: Compliance Targets]
- Attracting qualified applicants - [Goal #3: Improved Staffing]
- Motivating existing workforce and inspiring long-term commitment - [Goal #3: Improved Staffing/Retention].
- Strengthening Employer-employee relationships - [Goal #4: Employer of Choice]
- Offering innovating compensation and benefits packages - [Goal #4: Employer of Choice]
- Investing in employees' development - [Goal #4: Employer of Choice]
- Identifying and satisfying the needs of individual employees - [Goal #3:Improved Staffing/Retention]
- Improve scheduling - This helps reduce labor costs by avoiding overtime, reducing turnover and the need to add more work
Employee Goals
[TBD]
Human Resource Function Strategy
There are very many different types of HR strategy but at their heart, they all start with the same foundation; to create a work environment that's synonymous with engaged, productive and loyal staff (employees and contract workers). Human Resources function strategy deals with decisions on:
- pay and benefits;
- recruiting,
- selection, and orientation;
- career development and training;
- evaluation and incentive systems;
- policies and discipline; and
- management/executive selection processes.
Every organization is different and will be staffed by employees from different backgrounds, sectors, and with different goals and ambitions, values, beliefs, etc. The key to a successful HR strategy is to identify what unifies and motivates your employees, and to develop a strategic plan around that understanding. The following are examples of tools available to HR departments when developing their strategies and plans;
- Competitive salaries
- Enviable benefits packages
- Promotions opportunities
- Continuous staff training and development
- Transparent and regular communications.
- Focus on employee wellbeing
- Investment in corporate social responsibility (CSR)
- Employee autonomy
- Open-door policy
- Freedom to be creative
- Enhanced hiring practices.
Management should consider conducting regular surveys to determine what the employees value, and what motivates them,
Finance and Accounting Function and Strategies
The Finance Function is a part of financial management. Financial management is the set of activities concerned with control and planning of financial resources. In a business, the finance function involves the accounting and utilization of funds necessary for efficient operations.
Financial Function Types and Management
The function types include capital management, Cash management, Profit planning and cost controls,
Capital Management
This involves methods of funding a company's operations through raising/securing funding, classified into categories based on funding years:
Cash Management
The focus is on making sure there is enough money in the company's bank account. This function is concerned with making sure the business has enough liquidity to pay its suppliers and employees on time. If cash is getting tight, the finance people will make arrangements to use the firm's bank line of credit. Conversely, the company should find appropriate investments that produce better return for excess cash sitting in the bank account.
Profit Planning and Cost Controls
Develop financial statements for revenue, expences, and capital expenditures, and use these plans to determine profitability of products and services.
Risk Management
Financial Strategy
Financial strategies deals with decisions about capital acquisition, capital allocation, dividend policy, and investment and working capital/cash flow management.
The Finance Function is a part of financial management. Financial management is the set of activities concerned with control and planning of financial resources. In a business, the finance function involves the accounting and utilization of funds necessary for efficient operations.
Financial Function Types and Management
The function types include capital management, Cash management, Profit planning and cost controls,
Capital Management
This involves methods of funding a company's operations through raising/securing funding, classified into categories based on funding years:
- Long Term Finance - This includes finance of investments three (3) years or more; this financing can be sourced from owner capital, share capital, long-term loans, etc.
- Medium Term Finance - This is financing done between 1 and 3 years; this can be sourced from bank loans and financial institutions.
- Short Term Finance - This is finance needed below one year; funds may be acquired from bank overdrafts, commercial paper, advances from customers, trade credit, etc.
Cash Management
The focus is on making sure there is enough money in the company's bank account. This function is concerned with making sure the business has enough liquidity to pay its suppliers and employees on time. If cash is getting tight, the finance people will make arrangements to use the firm's bank line of credit. Conversely, the company should find appropriate investments that produce better return for excess cash sitting in the bank account.
Profit Planning and Cost Controls
Develop financial statements for revenue, expences, and capital expenditures, and use these plans to determine profitability of products and services.
Risk Management
Financial Strategy
Financial strategies deals with decisions about capital acquisition, capital allocation, dividend policy, and investment and working capital/cash flow management.
Production Function Strategy
Production function refers to the organization function responsible for the creation and delivery of products and services to customers. Typically, this function supports processes involved in converting labor, materials, etc., into goods and services with particular combination of qualities that a selected group of customers want.
Production strategy is a broad long-term action plan made for achieving the main objectives of an organization. Production strategies tell us what the production function/department must do to achieve the top aim of the organization. Production strategy deals with decisions/choices about how and where the products or services will be manufactured or delivered, technology to be used, management of resources, plus purchasing and relationships with suppliers.
Operational Goals
Operational goals are the workflow methods that bring the strategy to fruition, and exist at all levels of the organization, from CEO down to part-time employees. Operational goals are the short-term tactics designed to achieve the company's long-term strategy. Operational goals lay out increments called benchmarks; they streamline the day-to-day activities of the business. They measure daily, weekly, and monthly benchmarks. For example, the monthly budget report shows if a company's financial goals are on track. Manufacturing examines production reports to ensure the number of units produced meets production goals with minimum waste.
Production function refers to the organization function responsible for the creation and delivery of products and services to customers. Typically, this function supports processes involved in converting labor, materials, etc., into goods and services with particular combination of qualities that a selected group of customers want.
Production strategy is a broad long-term action plan made for achieving the main objectives of an organization. Production strategies tell us what the production function/department must do to achieve the top aim of the organization. Production strategy deals with decisions/choices about how and where the products or services will be manufactured or delivered, technology to be used, management of resources, plus purchasing and relationships with suppliers.
Operational Goals
Operational goals are the workflow methods that bring the strategy to fruition, and exist at all levels of the organization, from CEO down to part-time employees. Operational goals are the short-term tactics designed to achieve the company's long-term strategy. Operational goals lay out increments called benchmarks; they streamline the day-to-day activities of the business. They measure daily, weekly, and monthly benchmarks. For example, the monthly budget report shows if a company's financial goals are on track. Manufacturing examines production reports to ensure the number of units produced meets production goals with minimum waste.
Sales Function Strategy
The Sales function/department advises the marketing department based on its feedback with customers and focuses on customer contact to drive sales. Sales strategy is a plan to achieve a sales goal and is what directs the selling activities of any business. Selling is crucial to the success of any business, but it must be orchestrated to deliver success, which is what the sales strategy does. The sales strategy describes how a business will win, retain, and develop customers. Sales strategy is different from marketing strategy - overall approach to marketing products (it is how you build sustainable competitive advantage for the company's products through positioning, and differentiation by managing the marketing mix of the 7ps.
A sales strategy is particularly important in addressing business challenges such as:
When creating a sales strategy be clear as to which challenge(s) you are addressing.
Key Building Blocks of a Sales Strategy
A winning sales strategy has a number of elements/building blocks including:
Sales Plan
The tactical plan for the Sales department needs to be developed in concert with the marketing department. The sales pla should address how the volume of calls will be handled, how many people will this require and how sales leads will be followed. The marketing department will need to provide sales department with information about the TV campaign so sales can complete its own tactical plan.
The Sales function/department advises the marketing department based on its feedback with customers and focuses on customer contact to drive sales. Sales strategy is a plan to achieve a sales goal and is what directs the selling activities of any business. Selling is crucial to the success of any business, but it must be orchestrated to deliver success, which is what the sales strategy does. The sales strategy describes how a business will win, retain, and develop customers. Sales strategy is different from marketing strategy - overall approach to marketing products (it is how you build sustainable competitive advantage for the company's products through positioning, and differentiation by managing the marketing mix of the 7ps.
A sales strategy is particularly important in addressing business challenges such as:
- Stagnant sales revenues - Flat/declining sales
- Merger of Sales Forces - A need to align sales teams and have them pursue common objective.
- Start-up of new Venture - A need to get sales started and realizing the ambition of the founders and investors.
- New Product Introduction - A need to deliver the expectations set by management.
- Launch by a new competitor - A need to counter the threat from new competitors.
- Expansion to new markets - When a company is diversifying and expanding.
When creating a sales strategy be clear as to which challenge(s) you are addressing.
Key Building Blocks of a Sales Strategy
A winning sales strategy has a number of elements/building blocks including:
- Goal and Objectives - An effective sales strategy requires you know the goal of your business, i.e., what your overall aim for the business is.
- Target Market - You need to decide who will buy your products and services.
- Product and Services - Building the best products and services that meet the needs of their target markets.
- "What are the competitive advantages?" - This requires identifying the "strengths" and "weaknesses" of competitors that you will need to sell against and exploit.
- Route to market - How do you reach and sell to your customers?
- Selling Process -
Sales Plan
The tactical plan for the Sales department needs to be developed in concert with the marketing department. The sales pla should address how the volume of calls will be handled, how many people will this require and how sales leads will be followed. The marketing department will need to provide sales department with information about the TV campaign so sales can complete its own tactical plan.
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