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What is Business Strategy? Definition, Importance, Levels, and Examples

Business strategy is the battle plan for a better future. - Patrick Dixon

Scaling up a business without a clear strategy is like captaining a ship without a rudder. The success of any business depends on the strategy that one follows. The business strategy establishes the needs of the business. Business strategy plays an important role for businesses of all sizes and entrepreneurs. It sets the direction of the organization and helps to create goals to aim towards.

What is Business Strategy?

Business strategy is defined as the course of action or set of decisions that support entrepreneurs in achieving certain business goals. It is a master plan that outlines the direction the organization intends to make, the actions it will undertake, and the resources it will give to attain certain competitive benefits and drive sustainable growth. It involves a combination of decisions, actions, and resource allocation that positions an organization in its industry or market.

Why is a Business Strategy important?

Business Strategy plays a crucial role in guiding a firm’s growth, competitiveness, and success. It offers a roadmap for decision-making, resource providing, and adaptation to transforming circumstances, ensuring that the firm stays agile, focused, and well-prepared to achieve its goals successfully. It is carefully planned and flexibly designed with the purpose of:

• Achieving effectiveness
• Perceiving and utilizing opportunities
• Mobilizing resources
• Securing an advantageous position
• Meeting the challenges and threats
• Directing efforts, behavior and
• Gaining command over the situation

What is the Difference between Business Strategy & Business Plan & Business Model

Business Strategy, Business Plan, and Business Model are three distinct elements that offer various purposes in the world of business. They are vital for the success and sustainability of a business, and they are interconnected, with slight changes which are often confused by several aspiring business strategists , especially during their interviews. Here's a breakdown of the important differences between these:

Levels of Business Strategy

Effective strategic management consists of coordination and alignment across various levels of strategy to achieve the organization's long-term goals and competitive advantage. Business strategy can be categorized into different levels depending on its scope, focus, and the organizational hierarchy at which it functions.

The three primary levels of business strategy are:

• Corporate level strategy Corporate level strategy is a long-range, action-oriented, integrated, and comprehensive plan, which is formulated by the top management of a company. It is very helpful to ascertain business lines, expansion, growth, takeovers and mergers, diversification , integration, and the latest fields for investment.
• Business level strategy The strategies that relate to a specific business are known as business-level strategies. It is developed by the general managers, who convert mission and vision into concrete, clear, and result-driven strategies. It acts like a blueprint for the total business.
• Functional level strategy Developed by the first-line managers or supervisors, the functional level strategy involves decision-making at the operational level concerning functional areas such as marketing, production, human resources, research and development, finance, and so on.

How to Implement a Successful Business Strategy?

A business strategist feels that it is tough to ideate any plan in a few hours. It requires a step-by-step procedure to be associated with completing a SWOT analysis . Here are the top steps that can be considered to build the best business strategies and execute them with precision:

• Understand the targets One of the clearest challenges for growth is poor targeting. Clear target markets offer an organization the ability to create an integrated sales and marketing approach, where marketing enables sales productivity. Sales and marketing business plan gets executed more efficiently if the targets are fixed in a proper way.
• Outline the tactics A successful business strategy is made up of several various tactics, including both online and offline options. The goals, target audience, and industry factor into this decision. For instance, if the target audience is young, focusing on social media is more beneficial as this is primarily where this group consumes content. If the industry is product-based (for instance, jewelry designing), then using a more visual platform would better showcase the products. To be most effective, one must choose which methods are right for the business. Once the selection of tactics is done, list them in the plan and determine how they’ll help to reach the goals.
• Think long term In the scope of constant change, planning the horizons is usually shorter than it can be. However, only thinking quarter to quarter is a trap that may rob organizations of their ability to see around the bend. Best-in-class organizations create processes designed for a series of financial and non-financial metrics to treat strategy as an annual cycle rather than a one-time, static event.
• Create a timeline Time is precious mainly when it is about the business. Based on the goals and objectives one can set for the business. Creating a timeline that will define what tasks can be completed and when they can be completed. It is highly advisable to allocate extra time for unexpected events that may delay some of the goals.
• Focus on growth A thriving organization is a growing organization. It is only through growth that the firms can afford to invest in aspects such as technology, the best staff, and the latest tools. The business strategy should identify the segments where an organization will grow and in what proportion.
• Have a budget plan Creating a budget for the business strategy can inform the efforts by determining what can be done and cannot be. Choosing the most cost-effective options for the business ensures the success of the overall business strategy. This doesn’t have to limit the options. Paid advertising on social media and search engines gives access to manage budgets well.
• Make fact-based decisions Several executives often complain about a lack of fruitful data, but they consistently find information that is useful in the formation of business strategy. The business has a set of values that guides it. Making fact-based decisions will outline the values and ensure that the people who interact with the business are aware of them. It will also ease the message that reflects on the brand honestly so it can actively demonstrate the values outlined in the mission statement through the interactions with clients.
• Invest in pre-work Always allocate time to do proper pre-work so that one can be up to date. It is better to conduct proper end-to-end research and prepare relevant information in advance of the business strategy meetings. The goals and needs will change over time. Ideally, it is important to revisit the business plan every annum to make adjustments as needed. Follow industry news and trends that can add to the existing strategy.
• Execute well and measure results Measuring the effectiveness of the business strategy will inform the current plan and future efforts. Always be sure to track and measure the business so these measurements are effective. Set up a corporate calendar to enhance the productive meetings, and also to form a performance management cycle. One should write the marketing plan with this growth in mind so they can measure it. The execution of strategic planning needs discipline, and it must be taken care of by the senior executives to promote processes that keep the team focused.

Examples of Business Strategy

Hubspot developed and executed a perfect business strategy where it created a market that didn’t even exist – inbound marketing. It created an online resource guide explaining the limitations of interruption marketing and informing about the advantages of inbound marketing. The organizations even offered free courses to help the target audience understand its offering better.

Apple Inc. differentiated its Smartphone operating system iOS by making it simple as compared to Android. This differentiated it and built its followership. The organization has been following a similar business strategy for its other products as well.

Wrapping up

Establishing the business strategy keeps the business goals organized and focused, saving valuable time and money. With the increase in the competition, the demand for business strategy is becoming apparent and there is a tremendous increase in the types of business strategies used by the businesses.

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

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Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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The three levels of strategy.

In our second post on unwrapping what strategy really is, we take a look into the different levels of strategy. Time and time again, organizations we work with get hung up on what the essence of what strategy really is.

To lay the ground work on creating a good strategy, it is important to understand what it is first and foremost. As a leader, one must first ask the question, “how will we succeed?” in order to lay the ground work for creating a great strategy. Your strategies are the general methods you intend to use to reach your vision. No matter what the level, a strategy answers the question “how.” Your intended outcome is to have the general, umbrella methods you intend to use to reach your vision established.  There are six total “strategy” questions all good leaders must answer.

• Why do we exist?
• How will we behave?
• Where are we going?
• How will we succeed?
• What is most important right “now”

For now, we will focus on “how we will succeed.” With that in mind, nothing “strategy” would be complete without starting with the basis from Michael Porter. He writes, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” It’s a good litmus test to ask, “Have we done a good job answering the question how we will succeed?” Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. We certainly can’t answer the question of how we will succeed if we don’t think we are being different and unique and delivering value, and then of course being specific and clear and making hard choices. That is the kernel of good strategy and our basis from the guru of strategy.

Get the Free Guide to Build Your Strategic Objectives (with Examples!)

It’s always smart to start with an example of what good looks like. This organization-wide strategy statement from Edward Jones is a great example. It reads, “To grow to 17,000 financial advisors by 2012 by offering trusted and convenient face-to-face financial advice to conservative individual investors who delegate their financial decisions through a national network of one-on-one financial advisor offices.”

In our next post we will get into the details on the levels, but for now here is a top level view. The three levels of strategy are:

• Corporate level strategy: This level answers the foundational question of what you want to achieve. Is it growth, stability, or retrenchment?
• Business unit level strategy: This level focuses on how you’re going to compete. Will it be through customer intimacy, product or service leadership, or lowest total cost? What’s the differentiation based on?
• Market level strategy: This strategy level focuses on how you’re going to grow. Will it be through market penetration, market development, product or service development, or diversification?

In our next post we will be going into detail on the three levels of strategy, so stay tuned!

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Article • 8 min read

What Is Strategy?

The Three Levels of Strategy

By the Mind Tools Content Team

Key Takeaways

Strategy can be difficult to define, but essentially it can be thought of as: "Determining how we will win in the period ahead."

• In business there are different levels of strategy. Each of these has a different focus, and needs different tools and skills.
• Corporate strategy focuses on the organization as a whole, while business unit strategy focuses on an individual business unit or market.
• Finally, team strategy identifies how a team will help the organization to meet its overall goals and objectives.

You've probably heard the term "business strategy" used in the workplace.

But what is strategy, exactly? And are you aware that you need different types of strategy at different levels within your organization?

In this article, we're looking at some common definitions of strategy. We'll focus on three strategic levels – corporate strategy, business unit strategy, and team strategy – and we'll look at some of the core tools and models associated with each area.

Defining Strategy

Strategy has been studied for years by business leaders and by business theorists. Yet, there is no definitive answer about what strategy really is.

One reason for this is that people think about strategy in different ways.

For instance, some people believe that you must analyze the present carefully, anticipate changes in your market or industry and, from this, plan how you'll succeed in the future. Meanwhile, others think that the future is just too difficult to predict, and they prefer to evolve their strategies organically.

Gerry Johnson and Kevan Scholes, authors of "Exploring Corporate Strategy," say that strategy determines the direction and scope of an organization over the long term. For them, strategy should determine how resources should be configured to meet the needs of markets and stakeholders. [1]

Michael Porter, a strategy expert and professor at Harvard Business School, emphasizes the need for strategy to define and communicate an organization's unique position, and says that it should determine how organizational resources, skills, and competencies should be combined to create competitive advantage. [2]

While there will always be some evolved element of strategy, planning for success in the marketplace is important. This means organizations need to take full advantage of the opportunities open to them, and anticipate and prepare for the future at all levels.

For instance, many successful and productive organizations have a corporate strategy that supports their vision and mission. Each business unit within the organization then has a business unit strategy, which its leaders use to determine how they will compete in their individual markets.

In turn, each team should have its own strategy to ensure that its day-to-day activities help move the organization in the right direction. At each level, though, a simple definition of strategy can be: "Determining how we are going to win in the period ahead."

We'll now look more deeply at each level of strategy – corporate, business unit and team.

Corporate Strategy

Corporate strategy refers to the overall strategy of an organization that is made up of multiple business units, operating in multiple markets. It determines how the corporation as a whole supports and enhances the value of the business units within it; and it answers the question, "How do we structure the overall business, so that all of its parts create more value together than they would individually?"

Corporations can do this by:

• Building strong internal competences.
• Developing strong relationships in teams and between teams.
• Developing a set of robust values that everyone in the organization can get behind.
• Sharing technologies and resources between departments and teams.
• Raising capital from investors.
• Developing and nurturing a strong corporate brand.

So, at this level of strategy, we're concerned with thinking about how the business units within the corporation should fit together, and understanding how resources should be deployed to create the greatest possible value. Tools like Porter's Generic Strategies , the Boston Matrix , the ADL Matrix and VRIO Analysis will help with this type of high-level analysis and planning.

The organization's design is another important strategic factor that needs to be considered at this level. How you structure your business, your people, and other resources – all of these affect competitive advantage and can support your strategic goals.

Business Unit Strategy

Strategy at the business unit level is concerned with competing successfully in individual markets, and it addresses the question, "How do we win in this market?" However, this strategy needs to be linked to the objectives identified in the corporate level strategy.

Competitive analysis, including gathering competitive intelligence , is a great starting point for developing a business unit strategy. As part of this, it's important to think about your core competencies , and how you can use these to meet your customers' needs in the best possible way. From there you can use USP Analysis to understand how to strengthen your competitive position.

You'll also want to explore your options for creating and exploiting new opportunities. Porter's Five Forces is a must-have tool for this process, while a SWOT Analysis will help you to understand and address the opportunities and threats in your market.

Your business unit strategy will likely be the most visible level of strategy within each business area. People working within each unit should be able to draw direct links between this strategy and the work that they're doing.

When people understand how they can help their business unit "win," you have the basis for a highly productive and motivated workforce. As such, it's important to have a clear definition of the business unit's mission, vision and values .

What Is Blue Ocean Strategy?

The Blue Ocean Strategy is a business concept that emphasizes creating new market spaces (or "blue oceans") rather than competing in existing markets (or "red oceans").

In red oceans, companies strive to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profit and growth diminish, leading to fierce competition which often turns the ocean bloody red.

In contrast, the Blue Ocean Strategy encourages businesses to break out of the red ocean of competition by creating uncontested market space that makes the competition irrelevant. This involves redefining market boundaries, focusing on innovation, and creating value for both the company and the customer. The aim is to open up new demand and create high growth and profits.

A classic example is Cirque du Soleil. Instead of competing with traditional circuses, which were in decline and competed over a shrinking audience, Cirque du Soleil reinvented the circus experience. They combined elements of sophisticated theater and live music with stunning acrobatics, creating a new form of entertainment that appealed to a whole new adult audience, thereby creating a blue ocean.

For smaller businesses, corporate and business unit strategy may overlap or be the same thing. However, if an organization is competing in different markets, then each business unit needs to think about its own strategic direction.

It's important, though, that each business unit's strategy is aligned with the overall strategy of the corporation, particularly if the corporation's brand is important.

Team Strategy Implementation

To execute your corporate and business unit strategies successfully, you need teams throughout your organization to work together. Each of these teams has a different contribution to make, meaning that each team needs to have its own team-level strategy, however simple.

Here are some considerations when implementing your strategy:

• Team strategy must align to the business unit and corporate strategies, meaning that all levels of strategy support and enhance each other to ensure that the organization is successful.
• Define the team's purpose and boundaries using, for example, a team charter ; and to manage it using techniques such as Management by Objectives and use of key performance indicators .
• You need to be working efficiently to achieve the strategic objectives that have been set at higher levels of the organization. So, an important element of your team strategy is to implement best practices to help your team to meet its objectives. Activities that optimize supplier management , quality , and operational excellence are also important factors in creating and executing an effective team strategy.

Our Developing Your Strategy article presents a common-sense, step-by-step approach to strategy development, which you can apply to develop a corporate, business unit, or team strategy. You can also find out more about strategy development in our Essential Strategy Skillbook .

[1] Johnson, G. and Scholes, K. (2005). 'Exploring Corporate Strategy (7th edition),' Prentice Hall.

[2] Magretta, J. (2020). 'What Is Strategy?: An Illustrated Guide to Michael Porter (Illustrated edition),' Harvard Business Review Press.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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Business Plan: What It Is, What's Included, and How to Write One

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

What Is a Business Plan?

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Understanding Business Plans

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

How to Write a Business Plan

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

Common Elements of a Business Plan

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

The Bottom Line

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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What are the three levels of strategy in organizations.

Table of contents

What is corporate strategy, what is business level or business unit strategy, what is functional level strategy, what are the differences between corporate, business unit, and functional strategy.

Strategy is a very broad term and can mean a lot of different things depending on who you talk to. In this article, we will cover strategy through the lens of management consulting based on our experience at Bain, BCG, and McKinsey. In this context, there are three main levels of strategy in an organization:

The corporate level strategy that focuses on the company as a whole and is the overarching strategy.

The business level or business unit strategy that focuses on a specific business unit within the broader organization. If you’re a small organization, then corporate strategy and business unit strategy are often fused together in a single cohesive business strategy.

The functional level strategy focuses on a specific functional area or team, which is often closer to a tactical plan. You can argue that functional strategy is not actually a strategy level in itself, but for completeness, we include it here.

In the following we will cover what these three levels of strategy mean and how they are different.

Apart from these three core levels of strategy, there are various permutations and subcategories of strategy like digital strategy or growth strategy. These are not part of this article but in essence follow the same principles of a corporate or business unit strategy, where you create a plan within a context.

You can also take a look at our blog post “5 Key Elements of a Successful Strategy Document” to get tips and tricks on creating a strategy presentation.

Corporate strategy has many names, including portfolio strategy, organizational strategy, or simply company strategy.

A typical organization is made up of business units (or teams in a smaller company) that act as varying degrees of stand-alone entities. Together, the business units form the corporation, unified by a corporate head office.

The corporate strategy is the overarching strategy for the entire organization. It sets guardrails and direction for business unit strategies and should ideally be a set of objectives and actions that enable the group to create more value than the sum of its parts.  

The famous strategy scholar Michael Porter defines corporate strategy as 

A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy concerns how to create competitive advantage in each of the businesses in which a company competes. Corporate strategy concerns two different questions: what businesses the corporation should be in and how the corporate office should manage the array of business units. Corporate strategy is what makes the corporate whole add up to more than the sum of its business unit parts.

The ultimate goal of a corporate strategy is to create a roadmap for sustained value creation across its entire portfolio.

For an in-depth discussion on corporate strategy, see our article " Corporate Strategy: What Is It and How To Do It (With Examples) ". There are five key elements of a corporate strategy:

1. Setting a unified vision and ambition

Your corporate strategy should begin by defining your organization’s mission, vision, and purpose. This provides a unified direction for all subsequent choices in both your existing portfolio of businesses and in where, when, and how to invest in growth or divest assets.

Furthermore, your corporate strategy should include specific goals, both quantitative (externally or market-driven) and qualitative (internally or company-driven), to guide the organization and energize stakeholders.

2. Making portfolio choices

The second key element of a corporate strategy involves conducting a comprehensive portfolio review. This review assesses all the business units, products, or brands within the organization. It determines where to focus efforts, which industries and markets to enter, and how to diversify the product and service offerings.

The goal of your portfolio review should be to identify businesses or assets with the highest strategic potential, either as stand-alone entities or as part of the larger organization. This means making hard decisions on where to acquire, divest, and transform the portfolio, and importantly, how to allocate resources at a high level across business units (i.e. which businesses do you invest in for innovation and growth versus which businesses should be optimized for efficiency and cash-maximization). 

While the allocation of resources is a topic addressed separately in the next section, the portfolio review serves as a blueprint for determining which businesses or assets should be allocated resources.

To conduct a portfolio review effectively, you need a deep understanding of each business unit's current potential and future opportunities and threats, often informed by their individual business unit strategies. You can see more on this under the Business Level Strategy section further down.

The results of the portfolio review are typically presented in a matrix format, with one axis evaluating a business unit's current ability to grow or succeed internally and the other axis assessing the market conditions and external factors affecting the business unit.

3. Allocating resources

The third component of a corporate strategy involves how to allocate resources, particularly financial decisions related to investments in acquisitions, balancing investments with shareholder returns, and distributing resources among various business units or product lines. 

For public companies, this typically entails three primary financial considerations:

A. Capital structure

Capital structure is defined as a company’s mix of debt and equity. On a corporate strategy level, you need to decide how much funding will be allocated across your portfolio and which financial guardrails you want to put in place for that funding.

B. Capital deployment

Once the amount of available funding and associated guardrails are in place, the corporate strategy should allocate that funding across portfolio businesses according to the outcomes of the portfolio review. This typically means investing and acquiring aggressively in businesses or assets that have a lot of strategic potential, and minimizing costs through efficiencies and other optimizations in businesses that have less of a gap to their full potential.

C. Capital markets communication

If you’re a public company (or with external stakeholders like VC funds), then the final piece of your financial strategy is summarizing your other choices in a compelling story that makes strategic sense and should hopefully push your external value up.

4. Maximizing parenting advantages

The fourth element of a good corporate strategy is a thorough discussion of how the corporate entity can maximize each business unit (i.e. making the whole more than the sum of its parts) and consequently what role or form the corporate parent should take to achieve that.

This falls into three categories:

• Best portfolio operator: How can you from a corporate side facilitate cooperation between business units and portfolio companies? Which synergies can be leveraged? How can you share costs? Which customers can be cross-linked?  
• Best owner: How can you add differential value developing and managing the portfolio? How can you best capture value across the different businesses and allocate this to lift the entire portfolio? Which acquisitions and divestments should you make to bring the full organization to a better value creation point?  
• Best culture champion: How can you create energy and mobilize latent talent across the organization? Which values and principles should you instill, and which people should you hire to lead each business on this path?

Create a winning strategy project proposals with insights on writing proposals like McKinsey consultants .

5. Creating the overall roadmap

The fifth and final element of a corporate strategy is laying out an overall roadmap for sustained value creation.

This can be done in more or less detail depending on how involved the corporate parent is in each business unit strategy. But a well-known schema for roadmaps at this level is to break them down into three time horizons: short-, medium-, and long-term.

This typically corresponds to three levels of opportunities: a) immediate opportunities, b) bigger opportunities that need more work to realize, and c) long-term, transformational initiatives and ideas.

Each opportunity should be broken down into initiatives and actions and put together in a cohesive roadmap. The level of detail will become less and less the further out in time the roadmap goes.

Business level strategy is what most people think of when you mention the word strategy .

Business unit or business level strategy focuses on how to create a competitive advantage for that specific business in their specific market. You can also call this a business model strategy, as it often examines the elements of a business model as exemplified in e.g., the Business Model Canvas .

There are many ways to approach business level strategy and each method has its own merits. We would recommend not thinking too much about following a rigid framework, but rather working through your particular strategy in the way that seems most logical to you.

In addition, it helps to distinguish between the process of creating your strategy and creating your subsequent strategy presentation that summarizes that strategy.

Here, we will first go over a simple approach to creating a business level strategy and then briefly touch on translating that to a cohesive strategy document. For more information on how to write a strategy presentation and a template for creating one, see our Business Strategy template .

Defining the starting point

The first step of any strategy process is understanding your point of departure. Without a solid view on your starting point you’ll be operating blindfolded and not taking advantages of your current strengths nor adequately adapting to potential weaknesses or threats.

There are in general three components to creating a clear picture of your starting point and strategic arena:

A. Defining the guardrails of your strategic option space

B. understanding your current situation, c. mapping out your potential areas of growth.

Before you start looking at goals and initiatives for your new strategy, you need to understand your overall playing field. You can think of this playing field along two dimensions; Your strategic and financial degrees of freedom.

Along the strategic dimension, ask yourself questions like:

• To what extent are you playing offence (upside value creation) vs. defence (downside value protection)? And is it the right priority going forward?
• What is the right balance of growth inside and outside your core businesses?
• What is the urgency to pursue opportunities vs. managing downside risk of disruption?
• Do you need to consider radically different strategic directions, or can you stay within your current strategy with optimizations and tweaks?
• How does this fit into the overall corporate strategy?

Along the financial dimension, ask yourself question like:

• How do you define value? What is your value creation goal (and how does this fit into the overall corporate picture)?
• What is your risk appetite?
• What is your time frame?
• How much funding or cash reserves do you have to invest in new initiatives?

The answers to these questions will help you define the perimeters of your strategic option space.

Now that you have a clear picture of the overall playing field you can maneuver in, it’s time to build a baseline of your current situation on which to base your strategy.

This means creating a data-driven overview of where you stand in terms of both your industry and your competitive position now and in the future.

More concretely, you can answer the questions outlined in the picture below:

The final piece of the puzzle when defining your point of departure is understanding your potential areas of growth in terms of new opportunities, or areas where you’re losing market share or revenues in an otherwise stable or growing market.

This can typically be divided into two main buckets where bucket A means optimizing your current business and bucket B means finding new pools of revenue/experimenting with new business models. In consulting speak, you’ll often hear the terms grow (or reinvent) the core and new growth engines to describe buckets A and B, respectively, so we’ll use the same terms here.

Growing (or reinventing) the core

Once you understand your current situation and your strategic arena it becomes easier to identify ways to grow your core. Growing your core in basic terms means doing your current business better. This can be done with classic competitive levers like being cheaper than competitors, becoming more sustainable, optimizing your current processes and value chain to become more efficient and faster, expanding your products and services to include add-ons or adjacent value propositions etc. These are all examples of business level strategies that you can use to create a differentiated, competitive advantage. You can also talk about reinventing your core, where you typically stay within the broader boundaries of your business model in terms of customer segment and industry/area but completely transform the way you serve your customer needs to protect or increase your share of the profit pool (see e.g., this McKinsey article for inspiration).

A great, non-digital example of reinventing the core is the global beer brewery Carlsberg, which has effectively moved into both the artisanal and alcohol-free beer markets in addition to their traditional beers.

Apply the three strategic levels using our Business Strategy template .

Unlocking future growth

However, growing your core business is just one way to create value. The second and equally important bucket is the new growth engine bucket. This essentially means creating new sources of revenue for your business by creating/moving into entirely new products or services (like Amazon’s AWS business).

There are a multitude of great articles and inspiration videos on creating new growth engines and too many . See e.g., this Harvard Business Review article for a discussion on growth engines or this McKinsey article for tips on actually incorporating a growth strategy in your overall process.

Creating your strategy on a page

The final piece of a business level strategy is creating a strategy document that effectively summarizes the BU strategy and allows it to be easily communicated to both employees and across the rest of the organization.

Irrespective of the framework you have chosen to follow, developing a strategy document entails addressing five fundamental questions:

• What is our current situation in terms of our own performance, industry, competition, and the broader macro environment, and how will it affect us in the future? (I.e., a summary of your starting point)  
• Where do we have an existing competitive edge (or high potential for one) in e.g., customer segments, markets, or geographic areas, and how can we enhance this advantage through our solution delivery, differentiation in our value proposition, and the efficiency of our go-to-market approach?  
• What are our primary strategic choices required to establish and maintain these competitive advantages? How do these choices translate into strategic pillar areas and opportunities? What does success in these areas look like?  
• Which strategic initiatives must be implemented to realize these choices and achieve our goals? What organizational enablers or structures are needed to support these initiatives?  
• How do we integrate all of this into a comprehensive plan to ensure we have the appropriate resources and governance in place to drive strategic change effectively?

Examples of what a strategy-on-a-page can look like from our Business Strategy template

For most businesses, strategy essentially means focus – aligning their business model with customer value, competitive differentiation, and improving return on investment. Crafting a strategy often involves deciding what activities to forgo in order to allocate resources to more impactful initiatives. This process also highlights strengths and weaknesses within the business model. By concentrating on specific customer segments and aligning various components, companies can tap into their growth potential.

See our blog post “5 Key Elements of a Successful Strategy” for more practical tips or download our full Business Strategy template to get a jumpstart on your own strategy presentation.

The third and final level of strategy is functional strategy. Functions in an organization typically refer to the teams that are organized around a specific operational element of the business, or individuals in multi-function teams that have specific roles.

You can think of functions as both support functions that run across an organization, e.g., HR, procurement, technical infrastructure, and as functions related to the specific parts of the value chain, e.g., sales, marketing, customer service. Taken together, the collaborative work of the functions are what produce and deliver the value proposition and go-to-market.

The goal of a functional strategy is to best support and enable each business unit within the organization to achieve their strategic potential, while making sure the overall portfolio prioritization is adhered to.

Put simply, your functional strategy level is the strategy that guides the daily efforts of your employees and ensures your organization stays on the right path. Without well-defined functional strategies, your organization can quickly lose momentum and become stagnant while competitors forge ahead.

For larger organizations, it becomes crucial to consider how different functions can contribute to growth and collaborate effectively while adhering to the corporate strategy. Each function or department, including marketing, finance, IT, and operations, has its own set of goals and responsibilities. Establishing visible functional strategies that are consistent and align with the overarching corporate strategy significantly increases the likelihood of success.

Depending on the way your organization and business units are structured, the functional level strategy is sometimes closer to a tactical day-to-day plan (focused on execution rather than direction-setting). Regardless of whether this is the case, is it still important to have a systematic planning process in place for functional strategies to make sure the entire organization is aligned and consistent across strategic ambition, governance, and KPIs.

Enhance your strategic communication with insights on writing action titles like McKinsey .

Functional level strategy examples

Depending on how your company is organized, examples of functional strategies could be:

• HR strategy: HR strategies can range from simple “center-of-excellence”-type strategies where you provide the best systems and processes for businesses to use in their own people departments, to detailed complete HR strategies around recruitment, training, performance management, compensation, retention etc.
• Marketing strategy: Marketing strategies typically focuses on planning and executing marketing campaigns including identifying and understanding target customer groups, understanding the value propositions, and creating and running the actual campaigns or efforts to gain more customers. The larger an organization becomes, the more likely it is that marketing is kept within each business individually.
• R&D strategy: Depending on the industry, you may have a need for a distinct R&D strategy to help determine how resources are invested in creating new products, technologies, and services.
• IT strategy: Oftentimes it makes sense for an organization to have a shared technology infrastructure. Here, and IT strategy means planning for and managing the organization’s technology resources and includes decisions on which systems to use, how to store and manage data, how to address cybersecurity etc.
• Production strategy: You may also have a setup where a shared production facility and infrastructure are most beneficial. In this case, a production strategy often sets goals and initiatives around supply chain management, production planning, quality control, logistics, and inventory management in a way that best support the business units’ strategies.

These are just a handful of examples. Others could be strategies around distribution, sales, partnering or more. It all depends on how big and decentralized your particular organization is set up. If you don’t have specific functional strategies due to size or structure, then they’ll often be implicit in the business level strategy and the individual functional teams will have KPIs and tactical plans related to the business unit strategy.

Delve deeper into strategy formulation with our guide on the 5 Key Elements of Successful Strategy.

Corporate strategy is about your portfolio as a whole, deciding which businesses to be in, how to allocate capital, and how shareholders are rewarded.

Business unit strategy is the classic business model strategy of creating and maintaining a competitive advantage in your specific market. As mentioned, depending on the size of the organization, corporate and business unit strategy may be one and the same.

And finally, functional strategy is the operating level of the organization. Here the strategies are centered around how to best support and enable each business within the portfolio to achieve their strategic potential as outlined in the overall portfolio prioritization.

Building and executing a succesful strategy requires you to make sure all three levels of strategy are aligned and work in tandem. You may not necessarily need each business unit strategy to be mutually exclusive or for business units to have completely different markets etc. (in fact, sometimes you may want to run somewhat competing businesses to both run and reinvent your overall competitive advantage at the same time), but you do want to make sure that both your corporate strategy and functional strategies don’t undermine the efforts of the business unit strategies that are closest to customers and bring in revenues to the organization.

By creating consistent strategies on all three levels you’ll be able to better gain and sustain your overall competitive position and future-proof your organization.

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Three levels of strategy: key differences explained.

Learning about how the three levels of strategy in an organization work can help you to become a better leader ©Mykyta Dolmatov via iStock

There are three levels of strategy that run across an organization, with each playing a vital role in the success of a business. But what’s the difference between them?

Sat Feb 19 2022

Think of it like the different players in a soccer team—multiple people assuming various roles to achieve the same objective. A conventional business consists of people at different levels of the organization working together to keep a business operating as it should and support wider organizational goals.

But what are the three levels of strategy in an organization, and what’s the difference between them? BusinessBecause spoke to business school experts to find out.

The difference between the three levels of strategy in an organization

Strategy is at the heart of any effective decision made by managers in an organization. A carefully planned out and intentional strategy will provide guidelines that can inform what business actions the employees of an organization need to take.

That could be a strategy to reach new customers, to enter a new market, or to rebuild a workforce around a specific goal.

On the other hand, a lackluster strategy that’s been implemented without any thought can result in a general lack of understanding among employees about a business and its environment.

Strategic decision making within any organization takes place on three levels. The difference between the three levels of strategy in an organization is the level at which they operate in a business. The three levels are corporate level strategy, business level strategy, and functional strategy. 

These different levels of strategy enable business leaders to set business goals from the highest corporate level to the bottom functional level.  

“For conventional organizations with a clear hierarchy, three levels of strategy are necessary to enable clear division of labor and accountability,” says Chengwei Liu ( pictured ), associate professor of strategy and behavioral science at ESMT Berlin.

What is corporate level strategy?

The corporate level is the highest point in an organization, so the decisions made here will ultimately inform the business’ main goal, as well as the goals of the levels further down the organization. 

“Corporate level strategy involves the decisions that top managers make to enter and gain competitive advantage in multiple industries or markets,” says Sunkee Lee ( pictured ), assistant professor of organizational theory and strategy at Carnegie Mellon University’s Tepper School of Business. 

Corporate level strategy ensures that all business units are working towards a main overarching goal. The corporate level is also responsible for directing different business strategies across multiple business units. 

“This top-level strategy is concerned with how the corporate parent can add value to its business units across multiple dimensions, such as the product or market scope, vertical scope, and geographical scope,” says Florian Bauer, professor of strategic management at Lancaster University Management School.

Corporate level strategy examples

There are several key questions that corporate level strategy is aiming to answer.

One corporate level strategy decision is whether to forward or backward integrate, which is about identifying which stages in the industry value chain the firm is going to participate in, explains Sunkee from Carnegie Mellon.

Tesla is a good example. Here, Florian from Lancaster ( pictured ) explains that backward integration would involve entering more ‘upstream’ businesses, such as the lithium mining business for the battery production needed for the company’s electric vehicles. 

Meanwhile, forward integration would involve entering businesses that are more ‘downstream’. Think distribution or online dealerships.

Another key question answers how to manage the degree of diversification, says Florian.

A prime example of diversification at the corporate level is Amazon —the big tech giant has diversified into different business areas, covering ecommerce, streaming, grocery stores, and cloud-based web services.

A third core corporate level strategy decision relates to the geographic scope of the business. For example, Nike has retail stores all over the world, while the Macy’s department store has few stores outside the US.

What is business level strategy?

Business level strategy is concerned with designing ways for a business to gain a competitive advantage in a specific market.

“Business strategy is how a firm creates value for a defined activity on its market. It shows the way a firm competes, positions, and masters its rivalry interactions and industrial structure. For this purpose, the firm has to configure its value chain and [manage] its resources and capabilities to create a sustainable competitive advantage,” says Damon Golsorkhi ( pictured ), professor of strategy at Emlyon Business School. 

“Once you decide what business you’re in, then you need to decide who your customers are going to be, how you will attract them, and then encourage them to buy your product or service within an environment where other companies may be looking to capture those same customers’ attention, commitment, and money,” adds Jim Walsh, area chair of strategy at Michigan Ross School of Business.

If an organization consists of several business units operating in different business areas—like Amazon—specific goals and objectives need to be designed for each unit while also meeting the overarching goals set at the corporate level. 

Business level strategy examples

There are three interrelated questions that must be considered within business level strategy, says Jim ( pictured ) from Michigan Ross. 

The first is about focusing on the customers. Jim says this involves asking what they need or want, and whether they have the desire to pay for high quality or coveted brands?

Take a designer clothing brand like Balenciaga, for instance, who sell trainers for upwards of $800 to a market of people willing to pay more for high quality products. Luxury brands like that will have conducted thorough market research to understand their value proposition, what their customers want, and the most they’re willing to pay for an item.

Secondly, organizations need to consider what resources and capabilities their organization can offer. Jim says this is about asking whether they can innovate and reliably produce a high quality good or service and whether they can do this at scale.

Lastly, firms need to scope out the competition and continue to provide a product or service that consumers choose over other similar products. 

Take Apple, for example. Even though there are multiple tablets on the market with much more competitive pricing than an iPad, Apple’s product remains the market leader . This is largely due to the company's brand recognition and the image the firm has as a creator of quality technological devices and a master of innovation strategy.

What is functional level strategy?

Regardless of whether it’s the sales, marketing, or finance department, each functional area of a business should implement a functional level strategy to achieve its own goals, enhance operations, and support the wider business level strategy.

“Department managers or heads are usually responsible for functional strategies. Their formulation and implementation should connect to the organizational (or business level) strategy. For example, organizational level strategy should guide the research and development (R&D) department to focus on either new product development or existing product refinement,” says Chengwei from ESMT Berlin. 

Functional level strategy examples

For functional level strategy to be successful, department managers will need to ensure the daily operations within each department align with the defined corporate outcomes. This will involve implementing specific measures to track whether each area is meeting broader objectives. 

Functional strategy examples include a company’s marketing strategy, financial strategy, production strategy, or R&D strategy. Each of these separate strategies will require different tactical decisions to meet the wider corporate level strategy.

“A key skill or quality for departmental leaders responsible for functional level strategy is communication: understand how to translate organizational level strategy into strategies at the functional level and at the same time provide feedback when organizational level strategy needs to be revised,” says Chengwei.

Whether you’re making decisions at the corporate level, the business level, or the functional level, to be successful in business you need to become a confident strategic manager . This requires an in-depth understanding of the customers’ wants and needs, your business’ position in the market, and your own firm’s mission.

All three levels of strategy are equally important to meeting the overall corporate goals, and if you’re someone looking to run their own business one day, you’ll need to inspire all business levels to work in symbiosis to reap business success in a competitive market. 

Next Read:  How To Implement A Successful Innovation Strategy

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Well structured programs, great facilities and very good career development team. The alumni relations with the school are great and well maintained and fostered. Overall a great school right in the middle of Berlin.

Friday 7th October 2022, 00.13 (UTC)

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Three Levels of Strategy: Corporate Strategy, Business Strategy and Functional Strategy

Strategy is at the foundation of every decision that has to be made within an organization. If the strategy is poorly chosen and formulated by top management, it has a major impact on the effectiveness of employees in pretty much every department within the organization. In our previous article on ‘ What is Strategy?! ‘ we have already tried to define and explain what business strategy refers to and what is NOT considered to be part of strategy. In this article, we will dissect strategy in three different components or ‘ Levels of Strategy ‘. These three levels are: Corporate-level strategy, Business-level strategy and Functional-level strategy. Together, these three levels of strategy can be illustrated in a so called ‘ Strategy Pyramid ’ (Figure 1). Corporate strategy is different from Business strategy and Functional strategy. Even though Corporate-level strategy is at the top of the pyramid, we start this article by explaining Business-level strategy first.

Figure 1: Three Levels of Strategy Pyramid

Business-level strategy

The Business-level strategy is what most people are familiar with and is about the question “How do we compete?”, “How do we gain (a sustainable) competitive advantage over rivals?”. In order to answer these questions it is important to first have a good understanding of a business and its external environment. At this level, we can use internal analysis frameworks like the Value Chain Analysis and the VRIO Model and external analysis frameworks like Porter’s Five Forces and PESTEL Analysis . When good strategic analysis has been done, top management can move on to strategy formulation by using frameworks as the Value Disciplines , Blue Ocean Strategy and Porter’s Generic Strategies . In the end, the business-level strategy is aimed at gaining a competitive advantage by offering true value for customers while being a unique and hard-to-imitate player within the competitive landscape.

Functional-level strategy

Functional-level strategy is concerned with the question “How do we support the business-level strategy within functional departments, such as Marketing, HR, Production and R&D?”. These strategies are often aimed at improving the effectiveness of a company’s operations within departments. Within these department, workers often refer to their ‘Marketing Strategy’, ‘Human Resource Strategy’ or ‘R&D Strategy’. The goal is to align these strategies as much as possible with the greater business strategy. If the business strategy is for example aimed at offering products to students and young adults, the marketing department should target these people as accurately as possible through their marketing campaigns by choosing the right (social) media channels. Technically, these decisions are very operational in nature and are therefore NOT part of strategy. As a consequence, it is better to call them tactics instead of strategies.

Corporate-level strategy

At the corporate level strategy however, management must not only consider how to gain a competitive advantage in each of the line of businesses the firm is operating in, but also which businesses they should be in in the first place. It is about selecting an optimal set of businesses and determining how they should be integrated into a corporate whole: a portfolio. Typically, major investment and divestment decisions are made at this level by top management. Mergers and Acquisitions (M&A) is also an important part of corporate strategy. This level of strategy is only necessary when the company operates in two or more business areas through different business units with different business-level strategies that need to be aligned to form an internally consistent corporate-level strategy. That is why corporate strategy is often not seen in small-medium enterprises (SME’s), but in multinational enterprises (MNE’s) or conglomerates.

BCG Matrix and Levels of Strategy Video Tutorial

Example Samsung

Let’s use Samsung as an example. Samsung is a conglomerate consisting of multiple strategic business units (SBU’s) with a diverse set of products. Samsung sells smartphones, cameras, TVs, microwaves, refrigerators, laundry machines, and even chemicals and insurances. Each product or strategic business unit needs a business strategy in order to compete successfully within its own industry. However, at the corporate level Samsung has to decide on more fundamental questions like: “Are we going to pursue the camera business in the first place?” or “Is it perhaps better to invest more into the smartphone business or should we focus on the television screen business instead?”. The BCG Matrix  or the GE McKinsey Matrix  are both portfolio analysis frameworks and can be used as a tool to figure this out.

Figure 2: Hierarchy of Strategy

Levels of Strategy In Sum

The most common level of strategy is Business strategy and exist within strategic business units with as goal to gain competitive advantage in a certain market. If a company has multiple SBU’s, there needs to be an overarching Corporate strategy that ties all SBU’s together through corporate configuration. Here, top management must decide on resource allocation and where to invest and where to divest. Lastly, Functional strategy exist within departments such as Marketing, HR and Production. Ideally, we should refer to tactics instead of strategies because of the operational nature of the decisions made within these departments.  

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12 thoughts on “ Three Levels of Strategy: Corporate Strategy, Business Strategy and Functional Strategy ”

I can see how a business wants to build up its cooperation and they want to make sure that they can grow and build and get more revenue. Getting some better strategies to do so and to prevent them from losing money in a crisis with some help from a professional. It was interesting to learn about how there are some better investments and divestments so that they can be integrated into a portfolio.

Great Articles

Well explained with examples.. Thank you Keep posting such an articles

Such a wonderful blog about levels of strategy corporate business functional and I appreciate your effort for bringing this in to notice. Great blog indeed, will visit again future to read more!!

I appreciate your help in bringing this information or strategy and marketing framework to my notice.

A good insight indeed. So it literally means they is no how you can think of your business strategy before you study your environment ?Internal by VRIO,SWOT etc. and external by PESTEL or Porters 5 forces

Well explained the BCG model with suitable example . Thank you for uploading the video. It will be great help for all the students of strategic management. looking towards more such videos on strategic management area.

well simplified

thank you for the well explained BCG matrix, can you also look at Parenting advanrage concept and the Ashridge theory

As a student,I now knows that the ability to learn is an ultimate competitive advantage.Thanks for the simplicity and it’s very nice to invest my energy and time to read such instilling articles.

A commercial effectiveness strategy is critical for every business’s success, but it is especially critical for small businesses. A commercial effectiveness strategy, by definition, is a method for finding and delivering value to consumers through the production and distribution of goods or services.

thank you very much, very helpful information

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What Is A Business Level Strategy? How To Create It + Examples

Many leaders put a lot of effort into strategic planning, but their grand strategies fall short. More often than not, the issue lies not in the strategy they formulate, but in the strategy they overlook—the business level strategy. 

This strategy concentrates on the execution of initiatives tailored specifically to a business unit. It's like “the middle level” of strategy and as it often happens with middle-level things, it remains overlooked in the shadow of the bigger picture.

Gartner’s survey shows that 67% of key functions at a company are not aligned with business units and corporate strategies. It also shows that 67% of employees do not understand their role when new growth initiatives are launched. These findings suggest that most companies focus primarily on their overarching, high-level strategies, neglecting how these strategies translate to lower levels and functions.

Thinking in terms of strategy levels is a good way of breaking down your overall strategy into manageable parts. This approach makes it easier to understand who's responsible for what and how the strategy should be carried out.

In this article, we'll walk you through the components of a strategy at a business level. We'll show you how to write a perfect strategic plan for your business and then apply it, ensuring all the pieces fit together seamlessly.

🎁BONUS: Download Your Strategy Levels eBook. It's a comprehensive guide that covers all three levels of strategy and will show you how to create both corporate and business strategies.

What Is A Business Level Strategy?

Business level strategy is a sum of the strategic planning and implementation activities that set and steer the direction of an individual business unit. These activities will generally include how to gain a competitive advantage and create customer value in the specific market the business unit operates in.

As a result, organizations with only one distinct business will often combine business strategy with corporate strategy as a single strategy level.

Benefits Of A Business Strategy

Before we dive deeper into business strategy, let's quickly discuss why you should have it regardless of your business model or company size. A well-defined business strategy:

• Provides a clear roadmap and purpose, guiding decision-making and resource allocation .
• Helps align the efforts of different departments and teams, fostering coordination and synergy.
• Enhances competitive advantage by identifying unique value propositions and differentiation opportunities.
• Aids in identifying and capitalizing on market opportunities while mitigating potential strategic risks .
• Improves organizational efficiency, promotes innovation, and enables effective measurement and performance evaluation.

Ultimately, a well-planned and executed business strategy can lead to sustainable growth, profitability, and long-term success.

Difference Between Corporate Level Strategy And Business Level Strategy

There seems to be a lot of confusion surrounding the difference between corporate level strategy and business level strategy, so let’s clear things up and get our definitions straight.

A corporate level strategy comes into play when an organization has multiple businesses operating in different markets. It sets the overall direction for the entire organization . It decides which markets to compete in, how to allocate resources across the organization, and similar big-picture things.

On the other hand, a business level strategy zooms in on a specific business within the organization . It focuses on creating a game plan tailored specifically for that business unit to achieve success in its corner of the market.

To reiterate, a corporate level strategy is about steering the entire organization, while a business level strategy is about guiding a specific business unit to thrive in its market.

To help make the difference between the two levels clearer, let’s look at the example of a bank below and how they use strategy levels in their organization.

Types Of Business Level Strategies With Examples 

To better understand how business level strategy differs from other strategy levels, it’s useful to look at some business level strategy examples . 

When organizations are deciding on the best strategy for a specific business level, they typically consider five types. Let's take a closer look at each of them and see what kind of competitive advantage they offer:

Cost Leadership

A cost leadership strategy is all about offering products at a lower price than your competitors. To become cost leaders, businesses employ economies of scale and various tactics such as improving facilities, investing in tools, reducing overhead costs, and minimizing expenses related to R&D and POS operations. The ultimate goal is to achieve the lowest cost for your product or service.

Differentiation

Rather than focusing on lower costs and passing the savings onto customers, differentiation strategies emphasize the development and marketing of products in a manner that provides greater value to customers and focuses on unique features that warrant a higher price point.

The most famous example of differentiation is Apple , which applies this strategy across all business units (laptops, smartphones, tablets, etc.). Apple has heavily invested in R&D, customer service, and marketing, successfully carving a niche that allows them to charge a premium price for their products without compromising market share.

💡If you're considering pursuing a differentiation strategy, McKinsey's Three Horizons of Growth is a great framework to use.

Focused cost leadership

Businesses can concentrate their efforts by targeting a niche market or even a subset of that niche to further reduce costs.

For instance, a tool manufacturer might choose to focus their cost leadership strategy solely on the professional tradesperson market. 

By narrowing their focus, companies can better understand their customers' needs and create value more efficiently.

Focused differentiation

A focused differentiation strategy involves standing out from competitors while concentrating efforts on a smaller subset of their customer base.

This might seem counterintuitive, but deeply understanding a smaller customer segment allows businesses to anticipate customers’ needs more accurately, making value creation a smoother process.

Integrated low-cost/differentiation

Some businesses find success by combining a low-cost strategy and differentiation.

A great example is the rise of "premium fast food" restaurants, which offer the low prices associated with traditional fast-food chains while providing a differentiated range of offerings. The combination provides just enough uniqueness to cater to a particular market. The success of such restaurants is a testament to the effectiveness of this type of strategy.

📚 If you're struggling to determine the best business strategy for your business unit, consider exploring the Value Disciplines framework . It has guided many successful businesses in the right direction.

How To Write A Business Level Strategic Plan 

Once you've decided on the type of business strategy you want to pursue, you need to write a strategic plan that outlines the actions your business unit will take to achieve its vision.

If you need guidance on how to write a strategic plan , we've covered it in detail before. But it can’t hurt to quickly go over the process anyway.

1. Analyze where you currently stand

First, you need to gather and analyze key information about your business's present state and performance. 

This can include reviewing KPIs, doing a SWOT analysis , evaluating the competitive landscape , reviewing financial performance, gathering customer feedback, considering internal capabilities, and analyzing risks and challenges. 

Such an analysis will help you develop a fact-based understanding of your current position that should your strategic direction and choices. 

2. Prioritize focus areas

Identify the key areas you'll be focusing on when working towards your vision . Your analysis from the previous step should help. These focus areas should be more specific than your vision statement , but not as detailed as having particular metrics or deadlines attached to them.

3. Define strategic objectives

Strategic objectives represent what you want to accomplish . These objectives are relatively high-level but should still have a deadline associated with them. Make sure your strategic objectives align with one or more of your focus areas. Typically, you'll have 3-6 objectives for each focus area.

4. Assign KPIs

KPIs are values that help you measure progress toward your strategic objectives.  It's important to develop KPIs that directly contribute to achieving specific goals or objectives. Otherwise, you run the risk of diverting attention, time, and resources away from crucial KPIs.

5. Create projects

Projects describe what you will do to accomplish your objectives. Projects need to be specific, including clear deadlines and a description of the actions you'll take. 

Each project should align with at least one strategic objective and outline how it will contribute to achieving that objective. Typically, you'll have multiple projects for each strategic objective.

💡 Pro tip: When writing your strategic plan , it’s helpful to keep in mind that business level strategy decisions are typically based on analyzing two main factors: customers and core competencies.

👉 How Cascade can help:  

Cascade’s Planner makes it easier to create, share and execute strategic plans. To make things even simpler, you can use our template which will help break down your high-level plan into executable outcomes.

👉🏻 Get your free business strategy template here.  

More related business level strategy templates: 

• Business Growth Strategy Template
• Business Development Strategy Template
• Business Continuity Plan Template
• Business Expansion Plan Template
• Business Action Plan Template

‍ 💡Don't see what you're looking for? Explore our strategy template library with over 1,000 templates catered to different business units and industries.

The Key Focus Areas For Business Level Strategies

Now that we understand how to structure a business strategy, let's dive into the actual content that should be included. 

While the specifics will vary depending on the organization, there are generally two key elements that should be addressed in your business level strategy.

Core Competencies

In business level strategy, the concept of core competencies is key. 

Core competencies are the unique elements of a business that set it apart in the market and provide value to customers.

Identifying and leveraging these competencies to gain a competitive advantage is a major aspect of business level strategy.

If you're struggling to identify your business's core competencies or competitive advantages, a VRIO analysis is a great starting point that should help you out. 

👉 Grab your free VRIO strategy template here.

Understanding your customers is another essential aspect of business level strategy. 

You need to know who your current and potential customers are and how they interact with your business. 

To develop this understanding, consider the following who, what, and how questions:

Who are the customers?

Look at demographic descriptors and consumption patterns to paint a clear picture of your customer base. 

Unlike corporate strategists, business level strategists often have a precise understanding of their customers. That allows them to tailor strategic decisions in a way that just isn’t feasible at a corporate level.

What are the products that customers need?

Understanding the wants and needs of your customers is vital for developing and maintaining a competitive advantage. 

Successful businesses are the ones that fulfill customer needs and create value. That’s why you want to understand your target customers to the point where you can forecast changes in customer needs as well as anticipate fluctuations in demand. 

How can the business satisfy customer needs?

Finally, organizations need to leverage core competencies, resources, and their understanding of their target audience to ensure customer satisfaction. Businesses need to create a solution to a pressing problem and create a product or service that’s perceived as valuable in the eyes of the target market segment.

Putting it all together

Now that you have a solid understanding of your core competencies and the customers you serve, you have a powerful foundation for developing strategies that foster competitive advantage and drive value. This is the ultimate goal of the business level strategy.

How To Cascade Business Level Strategy To Functional Level Strategy

Once you've crafted your business strategy, it's important to ensure that it’s effectively communicated and translated into actionable plans at the functional level . 

This process, known as cascading, enables each department to align its efforts with the overall strategic objectives of the organization. Here’s how you do it:

• Share the business level strategy with department heads.
• Identify relevant objectives and projects for each department.
• Define focus areas based on the identified objectives and projects.
• Develop department-specific strategies and tactics. Address specific actions each department will take.
• Align efforts and coordinate among departments.

By following these steps, you can effectively cascade your business strategy to all key departments, coordinate efforts and achieve strategic objectives.

👉 How Cascade can help: 

With Cascade's Alignment & Relationships feature , you can see every plan in your workspace and how they connect to each other from a bird's eye view. Using a simple tree structure, you'll be able to see how every plan is aligned with each other and progressing across your organization.

Final Thoughts

Business level strategy is where abstract strategic directions from the corporate level translate into tangible initiatives that generate real-world value.

Together with a strategy execution platform like Cascade , it can help you achieve great strategic feats. The combination of the right approach and the right software empowers you to:

• Create simple yet impactful strategies

Our most successful customers have used Cascade to zoom in on certain parts of their business, identify their core competencies, and prepare suitable objectives. Instead of overcomplicating strategies, they kept it simple and actionable.

• Reverse engineer your strategy

Cascade enables you to see where your initiatives stand today and provides data as well as the wider context. These strategic insights will help you design metric-based strategies rooted in reality, rather than relying on disconnected numbers, outdated tactics, and irrelevant industry benchmarks.

• Adapt quickly and effectively

You can monitor the impact of a particular approach on a smaller, business level scale, recognize what’s working, and either change course or double down. 

These benefits and everything mentioned in the article make a business level strategy combined with a strategy execution platform immensely valuable. Good and iterative strategic planning at the business level will radically impact outcomes for any organization—from the very small right up to the very large one.

Business Level Strategy FAQs

Should a business level strategy change over time if so, why .

Yes, business level strategies should change over time to adapt to evolving markets, competition, customer needs, and internal capabilities.

The ability to adapt also reflects that the business is monitoring its current performance, the impact of its strategic decisions, and is proactively thinking about improvements. The ability to adapt is crucial for sustainable success.

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The Strategic Hierarchy: What are the 3 Levels of Strategy?

This article delineates the three levels of strategy within a business: corporate, business unit, and functional. Each tier is crucial for any organization striving to fulfill its goals with streamlined efficiency.

Understanding the Strategic Hierarchy

Strategic planning is multi-layered, involving corporate, business unit, and functional levels. The corporate tier sets broad company objectives and monitors performance. Business unit strategy revolves around competitive moves within distinct markets. At the functional level, strategies pertain to operational efficiencies in specific departments. When these levels are aligned and communicated across the organization, a unified front is established, paving the way to success.

Unveiling the First Tier: Corporate-Level Strategy

A sound corporate strategy creates a unified direction for a company, aligning all efforts with the core vision and mission. These high-level objectives inform decisions across the organization, such as which markets to penetrate and how. A clearly articulated corporate strategy facilitates the setting of performance standards and communicates strategic targets, improving the chances of overall success.

Deciphering the Second Tier: Business-Level Strategy

Business-level strategies deliver customer value and edge out competition, with approaches like cost leadership, differentiation, and focus targeting particular market segments. Thorough market analysis, such as SWOT, informs these strategies. A cost leadership strategy, for instance, emphasizes price competitiveness, whereas differentiation focuses on uniqueness, and focus strategies aim at specialized market niches.

Middle management is vital in translating broad strategic goals into tangible actions. They ensure daily operations embody the strategic intent and provide critical feedback for strategy refinement. For instance, they set individual sales targets and tactics in line with the larger strategy, fostering a responsive environment that can adapt to market changes while upholding long-term objectives.

Exploring the Third Tier: Functional-Level Strategy

At the departmental level, successful functional strategies hinge on alignment with broader goals, clear metrics, and the agility to respond to new developments. These strategies focus departmental action in the broader organization’s ambitions, integrating efforts for optimal effectiveness.

For example, a marketing plan might aim for a wider reach to boost the business’s market share aspirations.

Engaging Feedback Loops in Strategy Development

Feedback mechanisms at various strategic levels offer critical data-driven insights. At the corporate level, they influence overall strategy adjustment. Within business units, feedback on market presence guides tactical finesse. On the functional level, daily operational feedback informs support for broader strategies and continuous improvement, ensuring that all strategies maintain relevance and efficacy.

Why Execution Matters: Translating Strategy into Action

The synthesis across strategic levels is pivotal for actualizing a company’s vision. Coordination ensures consistency from the overarching goals to daily operations. Execution at the functional level upholds alignment with higher-up strategies, resolving inefficiencies and operational conflicts. This synergy fosters a concerted effort towards the organization’s aims, with each tier supporting and refining the subsequent one for effective strategy translation.

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17.3 Types of Plans

• Identify different types of plans and control systems employed by organizations.

From an activity perspective, organizations are relatively complex systems, as they are involved in numerous activities. Many of these activities require management’s attention from both a planning and controlling perspective. Managers therefore create different types of plans to guide operations and to monitor and control organizational activities. In this section, we introduce several commonly used plans. The major categories are hierarchical, frequency-of-use (repetitiveness), time-frame, organizational scope, and contingency. Table 17.1 provides a closer look at many types of plans that fall in each of these categories.

Hierarchical Plans

Organizations can be viewed as a three-layer cake, with its three levels of organizational needs. Each of the three levels—institutional, administrative, and technical core—is associated with a particular type of plan. As revealed in Table 17.1 , the three types of hierarchical plans are strategic, administrative, and operating (technical core). The three hierarchical plans are interdependent, as they support the fulfillment of the three organizational needs. In the organization’s hierarchy, the technical core plans day-to-day operations.

Strategic Plans

Strategic management is that part of the management process concerned with the overall integration of an organization’s internal divisions while simultaneously integrating the organization with its external environment. Strategic management formulates and implements tactics that try to match an organization as closely as possible to its task environment for the purpose of meeting its objectives.

Strategic plans address the organization’s institutional-level needs. Strategic plans outline a long-term vision for the organization. They specify the organization’s reason for being, its strategic objectives, and its operational strategies—the action statements that specify how the organization’s strategic goals are to be achieved.

Part of strategic planning involves creating the organization’s mission, a statement that specifies an organization’s reason for being and answers the question “What business(es) should we undertake?” The mission and the strategic plan are major guiding documents for activities that the organization pursues. Strategic plans have several defining characteristics: They are long-term and position an organization within its task environment; they are pervasive and cover many organizational activities; they integrate, guide, and control activities for the immediate and the long term; and they establish boundaries for managerial decision-making.

Operating plans provide direction and action statements for activities in the organization’s technical core. Administrative plans work to integrate institutional-level plans with the operating plans and tie together all of the plans created for the organization’s technical core.

Frequency-of-Use Plans

Another category of plans is frequency-of-use plans. Some plans are used repeatedly; others are used for a single purpose. Standing plans , such as rules, policies, and procedures, are designed to cover issues that managers face repeatedly. For example, managers may be concerned about tardiness, a problem that may occur often in the entire work force. These managers might decide to develop a standing policy to be implemented automatically each time an employee is late for work. The procedure invoked under such a standing plan is called a standard operating procedure (SOP).

Single-use plans are developed for unique situations or problems and are usually replaced after one use. Managers generally use three types of single-use plans: programs, projects, and budgets. See Table 17.1 for a brief description of standing and single-use plans.

Time-Frame Plans

The organization’s need to address the future is captured by its time-frame plans. This need to address the future through planning is reflected in short-, medium-, and long-range plans. Given the uniqueness of industries and the different time orientations of societies—study Hofstede’s differentiation of cultures around the world in terms of their orientation toward the future—the times captured by short, medium, and long range vary tremendously across organizations of the world. Konosuke Matsushita’s 250-year plan, which he developed for the company that bears his name, is not exactly typical of the long-range plans of U.S. companies!

Short-, medium-, and long-range plans differ in more ways than the time they cover. Typically, the further a plan projects into the future, the more uncertainty planners encounter. As a consequence, long-range plans are usually less specific than shorter-range plans. Also, long-range plans are usually less formal, less detailed, and more flexible than short-range plans in order to accommodate such uncertainty. Long-range plans also tend to be more directional in nature.

Organizational Scope Plans

Plans vary in scope. Some plans focus on an entire organization. For example, the president of the University of Minnesota advanced a plan to make the university one of the top five educational institutions in the United States. This strategic plan focuses on the entire institution. Other plans are narrower in scope and concentrate on a subset of organizational activities or operating units, such as the food services unit of the university. For further insight into organizational scope plans, see Table 17.1 .

Contingency Plans

Organizations often engage in contingency planning (also referred to as scenario or “what if” planning). You will recall that the planning process is based on certain premises about what is likely to happen in an organization’s environment. Contingency plans are created to deal with what might happen if these assumptions turn out to be wrong. Contingency planning is thus the development of alternative courses of action to be implemented if events disrupt a planned course of action. A contingency plan allows management to act immediately if an unplanned occurrence, such as a strike, boycott, natural disaster, or major economic shift, renders existing plans inoperable or inappropriate. For example, airlines develop contingency plans to deal with terrorism and air tragedies. Most contingency plans are never implemented, but when needed, they are of crucial importance.

Concept Check

• Define and describe the different types of plans defined in Table 17.1 and how organizations use them.

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Three Levels Of Strategy: What Makes Your Business Unique?

Strategy is a key element in any business and can help to make your company stand out from the competition.

The three levels of Strategy are alignment, progress, and stakeholders. Alignment means ensuring that the business’s objectives, goals, and resources are in line with each other.

Progress involves making sure the business is on track toward meeting its objectives. Stakeholders refer to all of those with interest in the business, including investors, customers, and employees.

All of these levels must be considered for a business to achieve success. By developing a strategic plan tailored to their specific needs and goals, businesses can ensure that they remain competitive and successful in their market. This makes a business unique and sets it apart from the rest.

Table of Contents

What Are The Three Levels Of Strategy?

Corporate level strategy.

This is the highest level of Strategy and focuses on the overall direction of the company and its long-term objectives.

It outlines where the company wants to be 5, 10, or even 20 years from now and how it can achieve those goals.

This type of Strategy helps companies to identify their core competencies, set long-term goals, and develop a plan for how to get there.

Business Level Strategy

The mid-level Strategy focuses on the company’s specific business units.

Business-level Strategy determines how each business unit will achieve its objectives by creating goals and strategies tailored to each unit. It also helps coordinate activities between different business units and ensures they all work towards the same common goal.

Functional Level Strategy

This is the lowest level of Strategy and is focused on the activities and processes within an organization.

The functional level strategy outlines the processes and tasks required for day-to-day operations, such as marketing, finance, research, development, or human resources.

This Strategy helps ensure that the organization is efficient in carrying out its goals and objectives.

Overall, having a strategy at all three levels is important for any organization. The corporate-level Strategy ensures that the company’s long-term vision aligns with its goals.

In contrast, the business-level Strategy helps ensure the company can achieve its goals by efficiently using resources and coordinating activities.

Finally, the functional level strategy ensures that the organization can carry out day-to-day operations effectively and efficiently.

With these three levels of Strategy, organizations may be able to achieve their objectives and reach their desired goals.

What is Corporate-Level Strategy?

A corporate-level strategy is a business’s overall plan to guide its operations and investments to maximize long-term growth and value.

The corporate-level Strategy includes the decisions organizations make about their desired areas of operation, the industries they compete in, and the competitive advantages they hope to achieve.

It is concerned with setting objectives, allocating resources, and coordinating activities across different business units.

By outlining a plan of action, corporate-level Strategy is intended to create competitive advantages and help businesses stay ahead of the competition.

The 4 Types of Corporate-Level Strategy Every Business Must Know

Every business needs a strong corporate-level strategy to survive and thrive in today’s competitive market.

While there are a variety of strategies that businesses can use, there are four essential types of corporate-level Strategies that every business must know.

This section will explore the different types of corporate-level strategies and explain why each one is important for businesses to understand and utilize.

Stability strategy

A stability strategy is a corporate-level strategy used when the company wants to maintain its current market share and profit margins.

It focuses on controlling costs and managing operations efficiently to maximize profitability. This Strategy does not involve any major changes, such as new products or entering new markets.

Instead, it is all about carefully managing existing resources and seeking minor improvements.

For example, a company might focus on implementing process improvements or adopting new technology to increase efficiency and reduce overhead costs.

This Strategy is best suited for companies that want to remain competitive while minimizing risk.

Expansion strategy

Expansion strategy is a type of corporate-level Strategy that focuses on growing the company by increasing its customer base, expanding its product offerings, or entering new markets.

This Strategy involves investing resources to increase the size and reach of the business.

For example, companies may open new stores or locations, expand distribution channels, develop new products or services, or explore international markets.

Expansion strategies come with risks and rewards; while they offer the potential for increased market share and sales, they also require large investments of time and money. Companies must weigh expansion’s costs and benefits before taking action.

Retrenchment strategy

The retrenchment strategy focuses on shrinking the business. This Strategy is used when the organization’s resources could be used more efficiently and profits are down.

Companies may opt for reduction to reduce costs and focus on core competencies. This Strategy often involves reducing staff, outsourcing certain operations, or selling off assets to improve profitability and gain a competitive advantage.

Retrenchment is also a short-term solution during difficult economic times or when a company faces intense competition.

While this Strategy can help increase efficiency and profits, it can also significantly negatively impact morale and the company’s reputation.

Therefore, companies should weigh all potential risks before implementing a retrenchment strategy.

Combination strategy

A combination strategy is a corporate-level strategy that combines elements of multiple strategies.

This type of Strategy is used when an organization wishes to capitalize on opportunities and mitigate risks.

A combination strategy can involve any combination of the other three corporate-level strategies, such as stability, expansion, and reduction.

This approach allows companies to benefit from both stability and growth and can be used to diversify their operations into different markets and industries.

Companies utilizing this Strategy need to have strong resources and capabilities, as it requires thoughtful planning to ensure the appropriate mix of strategies.

A combination strategy allows businesses to adjust their strategic plans as market conditions change, and they can use different strategies depending on the specific situation.

What is a Business Level Strategy?

Business Level Strategy is a plan of action that focuses on creating a unique and sustainable competitive advantage.

It is a set of strategies to enable a business to gain and maintain a competitive advantage over its competitors by differentiating the product or service, creating cost leadership , or focusing on a specific niche market.

The business-level Strategy outlines how a business will use its resources and capabilities to compete in the marketplace.

It includes pricing, customer service, technology, marketing, production, and distribution decisions.

Organizations can achieve higher profitability, improved customer satisfaction, and greater market share with a clear business-level strategy.

The Power of Cost Leadership

Cost leadership is one of the most powerful business-level strategies to boost your business. Cost leadership is based on reducing expenses and increasing efficiency so that you can provide a product or service at a lower price than your competitors.

This type of Strategy can help you attract more customers and increase your market share. You can achieve cost leadership by reducing production costs, minimizing labor costs, utilizing technology, and introducing better processes and procedures.

By reducing your costs, you can offer more competitive prices and take advantage of increased profit margins. Implementing a cost leadership strategy can be difficult, but the potential for success is high.

The Importance of Focus

Focus is a critical business-level strategy that helps you to maximize your success. It involves focusing on a specific area, product, service, or customer segment to ensure that you provide the best possible solutions.

Focusing on a limited area can help you better understand your customers’ needs, identify potential opportunities and develop better strategies for meeting those needs. This focused approach can help you better leverage resources and remain competitive in the market.

Furthermore, focus allows you to provide a higher quality product or service and increase customer loyalty.

By focusing on specific areas, you can become an expert in your field and gain a competitive edge. Ultimately, the focus is essential for helping businesses achieve success.

The Benefits of Differentiation

Differentiation is a business-level strategy that seeks to make a company’s product or service unique in customers’ eyes.

Differentiating your product or service can help you stand out and attract more customers. It can also help increase customer loyalty and trust, as customers will associate your brand with high-quality and reliable products or services.

Moreover, differentiation can also lead to higher prices, allowing your business to generate greater profits. To differentiate, focus on creating products or services that are superior to those offered by competitors in terms of quality, features, design, and other factors.

Additionally, emphasize your product’s or service’s unique benefits through effective marketing campaigns. Doing so can make your business stand out in the market and earn a competitive edge.

What is Functional Level Strategy?

Functional-level Strategy is a business strategy that focuses on individual departments, teams, or activities.

It looks at how each function can help the company achieve its overall goals and objectives. It involves setting goals for each unit and working out the resources needed.

It also involves determining how each department should interact with other departments to create synergy and optimal results.

The aim is to create an environment where everyone works together to help the organization succeed.

It’s important to consider how the resources available will help reach the desired outcome and how the Strategy fits into the company’s overall vision.

By considering all these factors, companies can craft an effective functional-level strategy that helps the organization reach its goals.

Key Variables to Consider When Developing a Functional-Level Strategy

The success of any organization’s overall Strategy largely depends on how well its functional-level strategies are developed and implemented.

With so many variables, knowing where to start when developing a functional-level strategy can take time and effort.

This section will provide an overview of the five key variables you should consider when developing a functional-level strategy for your organization.

From defining objectives to analyzing resources, this post will provide you with all the information you need to create a comprehensive and effective functional-level strategy.

When developing a functional-level strategy, the details are essential. It is important to consider the goals and objectives necessary for success.

The Strategy should define the actions and activities necessary to achieve these goals and objectives.

A clear understanding of the resources available, such as human capital , financial capital, and existing infrastructure, should be identified and analyzed.

Additionally, any constraints should be identified and addressed. Ultimately, any strategy should have measurable outcomes that can be tracked over time to ensure progress is being made.

The detail of the Strategy should also include an action plan that outlines the steps needed to achieve the desired results.

Attention to detail will help ensure that all stakeholders understand their roles and responsibilities.

Alignment is critical when developing a functional-level strategy. This means that each part of the Strategy should align with other areas within the organization, including organizational goals and mission.

Additionally, it should be aligned with the company’s core values, industry trends, and customer needs. Aligning each component of the Strategy will ensure that it will benefit the organization in the long run.

The alignment process should involve all stakeholders to guarantee everyone is on board with the final Strategy.

Everyone involved in this process will help avoid unnecessary conflicts or disagreements. Additionally, having clear communication lines between teams and departments can help guarantee that all stakeholders are aligned.

Taking the time to ensure that everything is properly aligned will help create a successful and beneficial strategy for the organization.

It’s important to track progress in the development of a functional-level strategy. Doing so will help ensure that the Strategy is properly implemented and that the desired results are achieved. To make progress tracking easier, it’s helpful to establish milestones and set measurable objectives.

This will allow you to identify areas for improvement and make adjustments if needed. Regular assessments of the Strategy should be conducted to ensure that it is still viable and meeting its goals.

Also, celebrate successes and recognize those who have contributed to the Strategy’s success. Doing so will help create a culture of accomplishment and reinforce the importance of strategic planning.

Stakeholders

When creating a functional-level strategy, it is essential to consider the stakeholders involved. Stakeholders can include internal and external parties, such as customers, employees, suppliers, shareholders, etc.

Understanding their needs and expectations is important, ensuring that the Strategy addresses them effectively. The Strategy should also allow for flexible responses to stakeholder feedback. As stakeholders have different levels of interest in the company’s strategies and operations, it is important to involve them in decision-making.

This helps to build trust and foster strong relationships between all parties.

Additionally, by involving stakeholders in strategic planning, the organization can draw on the knowledge and expertise of multiple sources, giving it a broader perspective on the business and helping to develop more informed decisions.

Existing Resources

When devising a functional-level strategy, it is important to consider the existing available resources.

This includes tangible assets such as physical buildings, machines, and equipment and intangible assets such as intellectual property, financial capital, and people.

Additionally, businesses should also take into account the current infrastructure, processes, and systems. It is important to leverage these resources strategically to achieve the desired results.

Analyzing existing resources allows you to better plan for future success using what you already have.

Knowing what resources you have available can help inform the strategies you choose to pursue and support tactical decisions about resource allocation.

Having a successful business requires a strong and well-defined strategy. This Strategy needs to be divided into three levels: alignment, progress, and stakeholders.

Alignment requires defining what makes your business unique. Progress involves developing and executing plans to achieve success.

Stakeholders are those who must be involved for the Strategy to be successful. Utilizing existing resources is also essential in creating a successful business.

Any business can succeed by understanding and following these three levels of Strategy.

What are the most important components for business-level Strategy making?

Creating a successful business-level strategy requires alignment, progress, stakeholder engagement, and an understanding of existing resources.

Achieving a well-structured strategy requires careful consideration of these components, ensuring that they all align with the desired outcome.

With this in mind, the Strategy must be regularly monitored to ensure it remains effective and relevant. Finally, stakeholders must be engaged to consider their needs and interests.

What are the three main questions strategy makers must consider?

-What is the desired outcome? This helps ensure the Strategy aligns with the organization’s goals.

-How do we get there? Alignment and progress are key to success, so understanding the steps and resources needed is essential.

-Who needs to be involved? Stakeholders must be identified and consulted to guarantee the strategy works. Existing resources must also be factored in.

What is the purpose of business-level strategies?

They aim to define how the company should compete and create value for customers, align resources with strategic goals, measure progress towards achieving those goals and ensure stakeholders are satisfied.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

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10 Free Business Plan Templates in Word, Excel, & ClickUp

Praburam Srinivasan

Growth Marketing Manager

February 13, 2024

Turning your vision into a clear and coherent business plan can be confusing and tough. 

Hours of brainstorming and facing an intimidating blank page can raise more questions than answers. Are you covering everything? What should go where? How do you keep each section thorough but brief?

If these questions have kept you up at night and slowed your progress, know you’re not alone. That’s why we’ve put together the top 10 business plan templates in Word, Excel, and ClickUp—to provide answers, clarity, and a structured framework to work with. This way, you’re sure to capture all the relevant information without wasting time. 

And the best part? Business planning becomes a little less “ugh!” and a lot more “aha!” 🤩

What is a Business Plan Template?

What makes a good business plan template, 1. clickup business plan template, 2. clickup sales plan template, 3. clickup business development action plan template, 4. clickup business roadmap template, 5. clickup business continuity plan template, 6. clickup lean business plan template, 7. clickup small business action plan template, 8. clickup strategic business roadmap template , 9. microsoft word business plan template by microsoft, 10. excel business plan template by vertex42.

A business plan template is a structured framework for entrepreneurs and business executives who want to create business plans. It comes with pre-arranged sections and headings that cover key elements like the executive summary , business overview, target customers, unique value proposition, marketing plans, and financial statements.  

A good business plan template helps with thorough planning, clear documentation, and practical implementation. Here’s what to look for:

• Comprehensive structure: A good template comes with all the relevant sections to outline a business strategy, such as executive summary, market research and analysis, and financial projections 
• Clarity and guidance: A good template is easy to follow. It has brief instructions or prompts for each section, guiding you to think deeply about your business and ensuring you don’t skip important details
• Clean design: Aesthetics matter. Choose a template that’s not just functional but also professionally designed. This ensures your plan is presentable to stakeholders, partners, and potential investors
• Flexibility : Your template should easily accommodate changes without hassle, like adding or removing sections, changing content and style, and rearranging parts 🛠️ 

While a template provides the structure, it’s the information you feed it that brings it to life. These pointers will help you pick a template that aligns with your business needs and clearly showcases your vision.

10 Business Plan Templates to Use in 2024

Preparing for business success in 2024 (and beyond) requires a comprehensive and organized business plan. We’ve handpicked the best templates to help you guide your team, attract investors, and secure funding. Let’s check them out.

If you’re looking to replace a traditional business plan document, then ClickUp’s Business Plan Template is for you!

This one-page business plan template, designed in ClickUp Docs , is neatly broken down into the following sections:

• Company description : Overview, mission, vision, and team
• Market analysis : Problem, solution, target market, competition, and competitive advantage
• Sales and marketing strategy : Products/services and marketing channels
• Operational plan : Location and facilities, equipment and tools, manpower, and financial forecasts
• Milestones and metrics: Targets and KPIs

Customize the template with your company logo and contact details, and easily navigate to different sections using the collapsible table of contents. The mini prompts under each section guide you on what to include—with suggestions on how to present the data (e.g., bullet lists, pictures, charts, and tables). 

You can share the document with anyone via URL and collaborate in real time. And when the business plan is ready, you have the option to print it or export it to PDF, HTML, or Markdown.

But that’s not all. This template is equipped with basic and enterprise project management features to streamline the business plan creation process . The Topics List view has a list of all the different sections and subsections of the template and allows you to assign it to a team member, set a due date, and attach relevant documents and references.

Switch from List to Board view to track and update task statuses according to the following: To Do, In Progress, Needs Revision, and Complete. 

This template is a comprehensive toolkit for documenting the different sections of your business plan and streamlining the creation process to ensure it’s completed on time. 🗓️

If you’re looking for a tool to kickstart or update your sales plan, ClickUp’s Sales Plan Template has got you covered. This sales plan template features a project summary list with tasks to help you craft a comprehensive and effective sales strategy. Some of these tasks include:

• Determine sales objectives and goals
• Draft positioning statement
• Perform competitive analysis
• Draft ideal customer persona
• Create a lead generation strategy

Assign each task to a specific individual or team, set priority levels , and add due dates. Specify what section of the sales plan each task belongs to (e.g., executive summary, revenue goals, team structure, etc.), deliverable type (such as document, task, or meeting), and approval state (like pending, needs revisions, and approved).

And in ClickUp style, you can switch to multiple views: List for a list of all tasks, Board for visual task management, Timeline for an overview of task durations, and Gantt to get a view of task dependencies. 

This simple business plan template is perfect for any type of business looking to create a winning sales strategy while clarifying team roles and keeping tasks organized. ✨

Thinking about scaling your business’s reach and operations but unsure where or how to start? It can be overwhelming, no doubt—you need a clear vision, measurable goals, and an actionable plan that every member of your team can rally behind. 

Thankfully, ClickUp’s Business Development Action Plan Template is designed to use automations to simplify this process so every step toward your business growth is clear, trackable, and actionable.

Start by assessing your current situation and deciding on your main growth goal. Are you aiming to increase revenue, tap into new markets, or introduce new products or services? With ClickUp Whiteboards or Docs, brainstorm and collaborate with your team on this decision.

Set and track your short- and long-term growth goals with ClickUp’s Goals , break them down into smaller targets, and assign these targets to team members, complete with due dates. Add these targets to a new ClickUp Dashboard to track real-time progress and celebrate small wins. 🎉

Whether you’re a startup or small business owner looking to hit your next major milestone or an established business exploring new avenues, this template keeps your team aligned, engaged, and informed every step of the way.

ClickUp’s Business Roadmap Template is your go-to for mapping out major strategies and initiatives in areas like revenue growth, brand awareness, community engagement, and customer satisfaction. 

Use the List view to populate tasks under each initiative. With Custom Fields, you can capture which business category (e.g., Product, Operations, Sales & Marketing, etc.) tasks fall under and which quarter they’re slated for. You can also link to relevant documents and resources and evaluate tasks by effort and impact to ensure the most critical tasks get the attention they deserve. 👀

Depending on your focus, this template provides different views to show just what you need. For example, the All Initiatives per Quarter view lets you focus on what’s ahead by seeing tasks that need completion within a specific quarter. This ensures timely execution and helps in aligning resources effectively for the short term.

This template is ideal for business executives and management teams who need to coordinate multiple short- and long-term initiatives and business strategies.

In business, unexpected threats to operations can arise at any moment. Whether it’s economic turbulence, a global health crisis, or supply chain interruptions, every company needs to be ready. ClickUp’s Business Continuity Plan Template lets you prepare proactively for these unforeseen challenges.

The template organizes tasks into three main categories:

• Priorities: Tasks that need immediate attention
• Continuity coverage: Tasks that must continue despite challenges
• Guiding principles: Resources and protocols to ensure smooth operations

The Board view makes it easy to visualize all the tasks under each of these categories. And the Priorities List sorts tasks by those that are overdue, the upcoming ones, and then the ones due later.

In times of uncertainty, being prepared is your best strategy. This template helps your business not just survive but thrive in challenging situations, keeping your customers, employees, and investors satisfied. 🤝

Looking to execute your business plan the “lean” way? Use ClickUp’s Lean Business Plan Template . It’s designed to help you optimize resource usage and cut unnecessary steps—giving you better results with less effort.

In the Plan Summary List view, list all the tasks that need to get done. Add specific details like who’s doing each task, when it’s due, and which part of the Business Model Canvas (BMC) it falls under. The By Priority view sorts this list based on priorities like Urgent, High, Normal, and Low. This makes it easy to spot the most important tasks and tackle them first.

Additionally, the Board view gives you an overview of task progression from start to finish. And the BMC view rearranges these tasks based on the various BMC components. 

Each task can further be broken down into subtasks and multiple checklists to ensure all related action items are executed. ✔️

This template is an invaluable resource for startups and large enterprises looking to maximize process efficiencies and results in a streamlined and cost-effective way.

The Small Business Action Plan Template by ClickUp is tailor-made for small businesses looking to transform their business ideas and goals into actionable steps and, eventually, into reality. 

It provides a simple and organized framework for creating, assigning, prioritizing, and tracking tasks. And in effect, it ensures that goals are not just set but achieved. Through the native dashboard and goal-setting features, you can monitor task progress and how they move you closer to achieving your goals.

Thanks to ClickUp’s robust communication features like chat, comments, and @mentions, it’s easy to get every team member on the same page and quickly address questions or concerns.

Use this action plan template to hit your business goals by streamlining your internal processes and aligning team efforts.

For larger businesses and scaling enterprises, getting different departments to work together toward a big goal can be challenging. The ClickUp Strategic Business Roadmap Template makes it easier by giving you a clear plan to follow.

This template is packaged in a folder and split into different lists for each department in your business, like Sales, Product, Marketing, and Enablement. This way, every team can focus on their tasks while collectively contributing to the bigger goal.

There are multiple viewing options available for team members. These include:

• Progress Board: Visualize tasks that are on track, those at risk, and those behind
• Gantt view: Get an overview of project timelines and dependencies
• Team view: See what each team member is working on so you can balance workloads for maximum productivity

While this template may feel overwhelming at first, the getting started guide offers a step-by-step breakdown to help you navigate it with ease. And like all ClickUp templates, you can easily customize it to suit your business needs and preferences.

Microsoft’s 20-page traditional business plan template simplifies the process of drafting comprehensive business plans. It’s made up of different sections, including:

• Executive summary : Highlights, objectives, mission statement, and keys to success
• Description of business: Company ownership and legal structure, hours of operation, products and services, suppliers, financial plans, etc.
• Marketing: Market analysis, market segmentation, competition, and pricing
• Appendix: Start-up expenses, cash flow statements, income statements, sales forecast, milestones, break-even analysis, etc.

The table of contents makes it easy to move to different sections of the document. And the text placeholders under each section provide clarity on the specific details required—making the process easier for users who may not be familiar with certain business terminology.

No business template roundup is complete without an Excel template. This business plan template lets you work on your business financials in Excel. It comes with customizable tables, formulas, and charts to help you look at the following areas:

• Highlight charts
• Market analysis
• Start-up assets and expenses
• Sales forecasts
• Profit and loss
• Balance sheet
• Cash flow projections
• Break-even analysis

This Excel template is especially useful when you want to create a clear and visual financial section for your business plan document—an essential element for attracting investors and lenders. However, there might be a steep learning curve to using this template if you’re not familiar with business financial planning and using Excel.

Try a Free Business Plan Template in ClickUp

Launching and running a successful business requires a well-thought-out and carefully crafted business plan. However, the business planning process doesn’t have to be complicated, boring, or take up too much time. Use any of the above 10 free business plan formats to simplify and speed up the process.

ClickUp templates go beyond offering a solid foundation to build your business plans. They come with extensive project management features to turn your vision into reality. And that’s not all— ClickUp’s template library offers over 1,000 additional templates to help manage various aspects of your business, from decision-making to product development to resource management .

Sign up for ClickUp’s Free Forever Plan today to fast-track your business’s growth! 🏆

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Asset management, / report, ai and the next wave of transformation, global asset management report 2024.

By  Dean Frankle ,  Alex Belyakov ,  Johannes Burkhardt ,  Joe Carrubba ,  Peter Czerepak ,  Lorraine Felix ,  Paul Hutchinson ,  Bingbing Liu ,  Maitreyee Malpekar ,  Michele Millosevich ,  Kedra Newsom Reeves ,  Edoardo Palmisani ,  Ian Pancham ,  Neil Pardasani ,  Ella Rabener ,  George Rudolph ,  Lior Valitsky ,  Andrea Walbaum , and  Ivana Zupa

The global asset management industry’s assets rose to nearly $120 trillion in 2023, reverting from a decline the year before. However, asset managers are facing a variety of challenges to their growth. Investors are gravitating to passively managed funds and other products that have lower fees even as asset managers’ costs increase. Their efforts to create new products that would differentiate them from competitors have largely fallen short, with investors sticking mostly to established products with reliable track records. Historically, the industry has been able to weather these pressures thanks to revenue growth that has been largely driven by market appreciation. In the years ahead, however, market appreciation is expected to slow, creating further challenges to the industry.

In the face of these pressures, asset managers will need to rethink the way they operate in order to maintain the growth and profitability of past years. The most viable way forward is by using an approach that we call the three Ps: productivity, personalization, and private markets. Asset managers should increase productivity, personalize customer engagement, and expand into private markets.

As the artificial intelligence (AI) technological revolution gathers momentum, asset managers have an opportunity to invest in AI and integrate it into their operations in ways that can enhance a three Ps strategy. AI can boost productivity by enabling improved decision making and operational efficiencies. (See the exhibit.) It can be leveraged to create and manage personalized portfolios at scale and to tailor the customer experience. And AI can enhance the efficiency of deal teams in private markets and boost their ability to drive value creation. In adopting AI to facilitate these key moves, asset managers should view the technological possibilities as transformational tools for their organization.

As part of this year’s report, we surveyed asset managers with collectively more than $15 trillion in assets under management to gather their views on the role of AI in their business. The vast majority of survey respondents expect to see significant or transformative changes in the short term, and two-thirds either have plans to roll out at least one generative AI (GenAI) use case this year or are already scaling one or more use cases.

Waiting is not an option when it comes to investing in AI. The technology is rapidly developing, and asset managers that do not start their journey now risk being left behind.

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Knowledge Expert, Team Manager

ABOUT BOSTON CONSULTING GROUP

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

© Boston Consulting Group 2024. All rights reserved.

For information or permission to reprint, please contact BCG at [email protected] . To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com . Follow Boston Consulting Group on Facebook and X (formerly Twitter) .

The meme-stock rally is dead as reality sets in amid GameStop's warning on revenue and plan to sell 45 million shares

• GameStop's meme-stock rally officially ended on Friday after the company announced plans to sell 45 million shares.
• The struggling video game retailer also said it expects a 29% decline in first-quarter revenue compared to last year.
• GameStop said the extreme rally in its stock does "not appear to be based on the underlying fundamentals of our business."

It was fun while it lasted. 

This week's meme-stock rally that sent shares of GameStop surging as much 271% is done. 

GameStop stock plunged as much as 29% on Friday to $19.70, down 70% from its intra-day high on Tuesday, and trading at the levels seen last Friday before the @TheRoaringKitty X account posted a meme that sparked a resurgence in the stock.

The rally in GameStop shares came to its sputtering conclusion on Friday when the struggling video game retailer announced plans to sell 45 million shares in an at-the-market offering, which could result in massive dilution for existing shareholders.

This type of share sale allows GameStop to, at its discretion, sell shares directly in the open market to willing buyers to raise capital, with an upside limit of 45 million shares. This is the same type of share sale agreement that allowed AMC Entertainment to take advantage of this week's meme-stock rally and raise $250 million in capital.

The only problem for GameStop is it appears too late for the company to take advantage of this week's meme stock rally, with all of its stock gains having been evaporated.

In a filing made with the SEC, GameStop said it expects first-quarter revenue to decline nearly 30% year-over-year to a range of $872 million to $892 million, and that it expects to see a net loss of $27 million to $37 million.

GameStop also said the company has experienced no fundamental change in its business that would explain the week's massive price surge.

"We did not experience any material changes in our financial condition or results of operations that would explain such price volatility or trading volume. Furthermore, since January 2021 through the date hereof, the market price of our common stock has seen extreme price fluctuations that do not appear to be based on the underlying fundamentals of our business or results of operations," GameStop warned investors in the prospectus tied to its share offering.

The company offered a sobering note to anyone interested in its stock: 

"Investors that purchase shares of our common stock in this offering may lose a significant portion of their investments if the price of our common stock subsequently declines," GameStop said. 

• Main content

The US is worried about an invasion, but China could take control of Taiwan without firing a shot, war experts warn

• The US and its allies are focused on preventing a Chinese invasion of Taiwan. 
• A new report argues there's a lack of readiness for other ways China could take control of Taiwan.
• An aggressive Chinese coercion campaign is far more likely than an invasion and already happening, experts warn.

With the US and its allies focused on what a Chinese invasion of Taiwan could look like, and how American forces could defend Taiwan if necessary, they're missing a glaring alternative strategy China could employ to capture Taiwan, a new report argues .

Defense experts say that an aggressive Chinese coercion campaign, short of war but still threatening, is more likely than a full-scale invasion and the US needs to prepare for such an event.

A new report co-authored by war experts from the American Enterprise Institute and the Institute for the Study of War explores a scenario where China undergoes a "coercion campaign that remains far short of invasion but nevertheless brings Taiwan under Beijing's control," identifying such an event as a "significant gap in US strategic thought."

Elements of such a campaign are already underway and include China's military exercises both in the Taiwan Strait and around the island, which are growing in scale and raising worries about escalation. Economic and diplomatic pressure is notable, and Chinese misinformation operations and the potential to slowly set up a blockade of Taiwan are also concerns.

The increasing Chinese military presence around Taiwan, the report says, could exhaust and overwhelm Taiwan's military and fuel a narrative that it is unable to defend the island, decreasing "trust in the military and feelings of security among the Taiwanese populace."

The report identifies four things key to resisting Chinese coercion. The first is a US-Taiwanese strategic relationship that foregoes concerns that "cooperation directly precipitates further escalation, whereas peace and prosperity are just around the corner if this partnership is halted."

Second, Taiwan's government must function despite Chinese efforts to undermine it in the eyes of the Taiwanese people through things like "economic warfare, cyber warfare, sabotage, rigorous (and pseudo-legal) inspections of ships carrying goods to Taiwan, air and sea closures, electronic warfare, and propaganda critical of government mismanagement."

These efforts include significantly degrading Taiwan's essential services, like clean water and electricity.

The third point is that Taiwanese people must resist Chinese "cognitive and psychological campaigns" aimed at breaking their rejection of the Chinese government, including "intimidating supporters of resistance, sowing doubt and fear among the population, and generating demands to trade political concessions for peace."

And lastly, there has to be resistance against "widespread information campaigns" that "aim to decrease the US public's and political leadership's willingness to support Taiwan." Such campaigns are already occurring, prompting anxiety that the US public and government may see getting involved in defending Taiwan as heightening risks of war at a significant cost with little to gain. The AEI and ISW experts argue that is not the case.

Related stories

Notably, the report says that "Taiwan is strategically vital to the larger US-led coalition to contain" China, arguing that a US-friendly Taiwan links America's allies in the northwestern Pacific with US partners and allies to the south."

A China-controlled Taiwan, however, "would become a springboard for further PRC aggression and would seriously compromise the US-led coalition's ability to operate cohesively."

The authors of the new report present coordinated actions China could pursue to prompt Taiwan and its partners to accept reunification, referring to it as a "short-of-war coercion course of action."

Some of Beijing's biggest problems are Taiwanese resistance to China, which continues to grow, especially after the historic election of Democratic Progressive Party candidate Lai Ching-te, who is currently the vice president, in January, and continued support from the US and its regional allies.

The new report looks at a hypothetical timeline that begins with the inauguration of Lai this month and leads into 2028, imaging how China and Taiwan could, by that point, come to a "peace" agreement. China could ultimately be successful in such a campaign, the authors say, if the US and its allies fail to recognize Beijing's coercive tactics or strategically plan to deter them.

The US must clearly "recognize the possibility and danger of a coercion campaign that is far more intense than the one currently ongoing against Taiwan and develop ways to prevent Taiwan's isolation through means short of war," they write.

The report's authors argue that "increased efforts in the information domain will be key to ensuring that the US government and friendly international audiences do not fall prey to [Chinese] information operations intended to reshape the way Americans and key international actors think."

US-Taiwanese relations and concerns about an aggressive China in the Pacific region are often at the forefront of the minds of US officials and experts, but the focus is frequently on hard power elements, even if there is recognition of some of the coercive aspects of Chinese behavior.

In March, US Navy Adm. John Aquilano, then the commander of US Indo-Pacific Command, stressed that China was pursuing a massive military build-up not seen since World War II and "all indications" pointed to it "meeting President Xi Jinping's directive to be ready to invade Taiwan by 2027 ." He also told the US Armed Services House Committee China's actions indicated it would ready to unify Taiwan by force, if necessary.

Aquilano urged lawmakers to intensify the US' military development and posturing in the Pacific in order to deter such a fight.

And, earlier this month, over a dozen US lawmakers wrote to US Navy Secretary Carlos Del Toro and Air Force Secretary Frank Kendall, raising concerns about what preparations were being made to harden the US presence in the Pacific and deter military action from China .

Of the lawmakers' concerns, the most prominent appeared to be the lack of active and passive defenses protecting US bases in the area, specifically on Guam and in Japan. "We are concerned about the alarming lack of urgency by the Department of Defense in adopting such defensive measures," they wrote, adding that "it is apparent that the Pentagon is not urgently pursuing needed passive defenses" to harden US bases and airfields from a vicious, preemptive strike by China's threatening missile force .

Watch: China shows how it would attack Taiwan as tensions rise

• Main content

The 20 Most Stressful Jobs

How does your career compare when it comes to stress? Take a look at the most stressful jobs.

Getty Images

Stressful jobs can be fulfilling because they make a difference – in people’s health, public safety or a company's bottom line. And high-stress jobs often come with high pay. Find out whether your job is among the most stressful careers, according to experts, and how it compares with other high-stress careers from U.S. News' 100 Best Jobs ranking . Data comes from the U.S. Bureau of Labor Statistics.

Anesthesiologist

Median salary: $239,200 Education needed: Doctoral or professional degree Expected job growth by 2032: 2.6%

Anesthesiologists are health care professionals who monitor patient health during a procedure, adjusting the amount of anesthetic to relieve pain. "The need for precision and constant vigilance, coupled with the potential for severe complications and the unpredictability of patient responses, makes this a highly stressful job," organizational psychologist Etty Burk said in an email.

Learn more about anesthesiologists .

Business Operations Manager

Median salary: $98,100 Education needed: Bachelor’s degree Expected job growth by 2032: 4.2%

Business operations managers are responsible for managing all business operations and setting organizational goals. "Their stress often stems from managing budgets and optimizing processes, all while meeting organizational goals and deadlines – often without control over external factors like the business market and employee behavior that can impact outcomes," Burk said.

Learn more about business operations managers .

Clinical Social Worker

Median salary: $60,280 Education needed: Master’s degree Expected job growth by 2032: 9.6%

Clinical social workers are licensed social workers who can diagnose and treat individuals with behavioral, mental and emotional conditions.

While it can be rewarding, social work can be a stressful profession. “It used to be that jobs that had lives on the line every day, like first responders, were believed to face the most stress. While their jobs are still incredibly challenging, roles that involve supporting our communities have seen dramatic demands for their time and energy,” Kelly Roehm, career consultant and a senior certified professional by the Society of Human Resources Management, wrote in an email.

Learn more about clinical social workers .

Community Health Worker

Median salary: $46,190 Education needed: High school diploma or equivalent Expected job growth by 2032: 14.1%

Community health workers rank No. 2 among the Best Jobs Without a College Degree and No. 4 among the Best Social Services Jobs . They work with community and health professionals to promote wellness.

According to Roehm, because communities often lack adequate resources, these workers are often paid far less than other health care professionals. “Coupled with loss of funding, increasing caseloads and burnout have impacted these vital workers,” she said.

Learn more about community health workers .

Child and Family Social Worker

Median salary: $50,820 Education needed: Bachelor’s degree Expected job growth by 2032: 5.3%

Child and family social workers provide interventions and support to ensure the well-being of children and families in need. “Post-COVID, we saw rising rates of children in school struggling to keep up and parents trying to balance child care and work, which is why children's services workers are carrying a heavy load,” Roehm said.

Learn more about child and family social workers .

Median salary: $155,040 Education needed: Doctoral or professional degree Expected job growth by 2032: 4.4%

Dentists identify and treat problems with a patient's mouth, gums and teeth. Career counselor Lynn Berger says that dentists have one of the most stressful jobs because most patients don’t like going to the dentist and may even feel scared or uncomfortable.

Managing the emotions that patients experience can be mentally taxing. “The most stressful occupations are those with much responsibility and not a lot of positive reward and feedback,” she explained in an email.

Learn more about dentists .

Firefighter

Median salary: $51,680 Education needed: Postsecondary nondegree award Expected job growth by 2032: 3.6%

Firefighters are responsible for responding to emergency situations involving fires, hazardous materials and other disasters.

“Firefighters work in dangerous and high-pressure environments where split-second decisions can mean life or death,” Conor Hughes, an SHRM senior certified professional and HR consultant, wrote in an email.

Learn more about firefighters .

Financial Analyst

Median salary: $90,680 Education needed: Bachelor’s degree Expected job growth by 2032: 8.2%

Financial analysts are responsible for analyzing financial data, trends and market conditions to help businesses make informed financial decisions. While they make lucrative salaries, their job is not easy. "The need for accuracy, staying updated on market trends and making impactful decisions under tight deadlines is compounded by the volatility of financial markets, which financial analysts cannot influence," Burk said.

Learn more about financial analysts .

High School Teacher

Median salary: $62,360 Education needed: Bachelor’s degree Expected job growth by 2032: 1%

In the U.S., high school teachers typically teach students from the ninth through 12th grades. While working with teenagers can be rewarding, it can be stressful as well.

“Educators often work long hours for little pay while managing overloaded classrooms, meeting strict curriculum standards and dealing with challenging student behaviors. This results in high attrition,” Hughes explained.

Learn more about high school teachers .

HR Specialist

Median salary: $63,080 Education needed: Bachelor’s degree Expected job growth by 2032: 6.3%

Human resources specialists’ duties can include helping with recruiting, facilitating employee onboarding and supporting employees in managing their compensation and benefits packages. “HR specialists are typically the most stressed role for a good three weeks during performance reviews and compensation processes,” Daniel Space, senior HR business partner director, wrote in an email.

Learn more about HR specialists .

Median salary: $135,740 Education needed: Doctoral or professional degree Expected job growth by 2032: 7.5%

Lawyers rank No. 1 among the Best Social Services Jobs and No. 14 among the Best-Paying Jobs. They’re licensed professionals who provide legal advice to individuals or businesses in one or more areas of law.

“The adversarial nature of law combined with billable hour requirements, client demands and high-stakes cases create a pressure-cooker environment for many attorneys. If you’re in this field, my advice is to set boundaries, delegate tasks when possible and build time for stress management,” Hughes said.

Learn more about lawyers .

Marriage and Family Therapist

Median salary: $56,570 Education needed: Master’s degree Expected job growth by 2032: 14.9%

Marriage and family therapists are mental health professionals licensed to diagnose and treat mental and emotional disorders within the context of marriage, couples and family systems.

While this career can be fulfilling, it's rather demanding. "The challenge of providing effective support while maintaining professional boundaries can be emotionally draining, and factors beyond their control can influence the progress of therapy," Burk explained.

Learn more about marriage and family therapists .

Mental Health Counselor

Median salary: $51,240 Education needed: Bachelor’s degree Expected job growth by 2032: 10.6%

Mental health counselors assist patients with processing life experiences that can lead to grief and trauma. Of course, helping people achieve better mental health is deeply rewarding, but it could leave you feeling drained.

Also, as the pandemic led to rising mental health needs, mental health counselors experienced increasing caseloads, more stress and higher burnout rates.

Learn more about mental health counselors .

Nurse Practitioner

Median salary: $121,610 Education needed: Master’s degree Expected job growth by 2032: 44.5%

Nurse practitioners rank No. 1 among the 100 Best Jobs, the Best STEM Jobs and the Best Health Care Jobs .

Nurse practitioners are registered nurses with additional education, which allows them to take patient histories, perform physical exams, order labs, prescribe medicine and even authorize treatment plans.

“However, due to the high-stakes nature of their profession, their enormous workloads, irregular hours and their frequent exposure to patient trauma and suffering, nurse practitioners, along with physicians and other frontline health care workers confront extreme stress,” Hughes said.

Learn more about nurse practitioners .

Median salary: $49,090 Education needed: High school diploma or equivalent Expected job growth by 2032: 5.4%

Paramedics are highly trained professionals who assess, treat and transport patients who need urgent medical attention. Being a paramedic can be rewarding but mentally and physically taxing.

“Paramedics operate in dangerous, high-pressure environments where split-second decisions can mean life or death. The threat of violence combined with witnessing trauma on a regular basis contributes to extremely high rates of PTSD, depression and anxiety among first responders,” Hughes said.

Learn more about paramedics .

Patrol Officer

Median salary: $65,790 Education needed: High school diploma or equivalent Expected job growth by 2032: 3.3%

Patrol officers are members of local or state law enforcement agencies responsible for preventing illegal activity and protecting communities. Exposure to violence, crime and the physical demands of the job can all contribute to a high stress level.

If you’re interested in becoming a patrol officer, Hughes recommends that you seek counseling, peer support and stress management training to keep your mental health in check.

Learn more about patrol officers .

Median salary: $227,180 Education needed: Doctoral or professional degree Expected job growth by 2032: 3.1%

Physicians, or primary care doctors, are patients' first stop when they experience health issues like headaches or heart problems.

Because of the high-stakes nature of their profession, heavy workloads and frequent exposure to patient trauma, physicians and other frontline health care workers are often under a tremendous level of stress.

Learn more about physicians .

Sales Managers

Median salary: $130,600 Education needed: Bachelor’s degree Expected job growth by 2032: 4%

Sales managers rank No. 2 among the Best Sales and Marketing Jobs and No. 17 among the Best-Paying Jobs.

Sales managers are responsible for orchestrating an organization’s sales process, including product development, customer response and data collection. "This profession can be stressful since you must face the pressure of meeting or exceeding sales targets. You must also motivate your team, handle rejections and adapt to market changes. Plus, success is often dependent on market conditions and customer behavior that you cannot control," Burk said.

Learn more about sales managers.

Software Developer

Median salary: $127,260 Education needed: Bachelor’s degree Expected job growth by 2032: 25.7%

Software developers rank No. 1 among the Best Technology Jobs and No. 2 among the Best STEM Jobs.

Although software developers earn lucrative salaries, especially those who work at top companies like Meta or Google, the job can be stressful and fast-paced. These professionals use their design and coding skills to create software for clients and users. According to Space, they can sometimes feel “extremely stressed between product updates and launches.”

Learn more about software developers .

Median salary: $239,200 Education needed: Doctoral or professional degree Expected job growth by 2032: 1.7%

Surgeons operate on people in need of medical treatment related to diseases, broken bones and other issues. An error made in a critical procedure can change someone’s life or be fatal, which is why surgeons are often under high stress.

If you’re interested in entering this career field, Hughes recommends that you try to separate your professional life from your personal one. “It's very easy to allow the suffering you see at work to influence your personal energy,” he said.

Learn more about surgeons .

15 Best Jobs You've Never Heard Of

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