Strategic Business Leader · Concepts of strategy

What is Strategy? Levels and Strategic Management in ACCA SBL

Updated 11 October 2026 · Fact-checked

Strategy is the long-term direction of an organisation that aims to achieve its objectives and gain advantage in a changing environment. It works at three levels: corporate, business and functional. Strategic management is the process of analysis, choice and implementation, applied to the SBL case scenario.

Understand What is Strategy? Levels and Strategic Management

Strategy is the long-term direction and scope of an organisation. It sets out where the organisation wants to go, which markets and activities it will be in, and how it will win there. It uses the organisation's resources to meet the needs of its stakeholders in a changing environment.

Strategy is not a detailed plan or a budget. It deals with big, long-term choices that are hard to reverse. Examples are entering a new country, buying a competitor or changing the business model. Day-to-day decisions are operational, not strategic.

Strategy is made at three levels. Corporate level asks: what businesses should we be in? It covers scope, diversification, acquisitions, disposals, how resources are shared across the group, and the overall value the centre adds. Business level (also called competitive level) asks: how do we compete in this market? It covers competitive advantage, pricing, positioning and target customers. Functional (operational) level asks: how do finance, marketing, HR, IT and operations support the business strategy? It deals with how resources, processes and people deliver the strategy.

The levels must fit together. Corporate strategy sets the frame, business strategy competes within it and functional strategies deliver it. If a functional strategy pulls the other way, such as a cost-cutting operations plan in a premium-quality business, the strategy fails.

Strategic management is the process of managing strategy. It has three linked parts. Strategic analysis looks at the environment, the organisation's resources and capabilities, and its purpose and stakeholders. Strategic choice generates options and evaluates them, then selects one. Strategic implementation puts the choice into action through structure, people, systems, change and control. In real life these parts overlap and loop back. In the exam you use them as a framework to organise your answer.

Key rules to remember

Definition of strategy: Strategy = long-term direction + scope + advantage, in a changing environment, to meet stakeholder needs; Use these elements when asked to define or explain strategy. Tie each to the scenario.
Three levels of strategy: Corporate (where to compete) → Business (how to compete) → Functional (how to support); Corporate is about scope of the whole group. Business is about advantage in one market. Functional is about delivery.
Strategic management process: Analysis → Choice → Implementation; Also known as position, choices and action. Feedback and review link the stages.

How to solve What is Strategy? Levels and Strategic Management questions

Use this method for any question on strategy, levels or the strategic management process. The scenario always decides which points score.

1Read the requirement and mark the verb: define, explain, discuss, advise or evaluate. This sets the depth.
2Identify the organisation's current position in the scenario: single business or group, one market or many, where decisions are made.
3If levels are asked, sort the facts from the case into corporate, business and functional. Use the question each level answers.
4If the process is asked, map the case facts to analysis, choice and implementation. Say which stage the company is in or has skipped.
5Apply, do not just define. Give one case fact per point, such as a named division, market or decision.
6Check fit between the levels or stages. Point out any conflict, such as a functional action that undermines the business strategy.
7Conclude with a clear recommendation or judgement. Use a short professional tone suited to the reader named in the task.

Quickest way: Level-and-stage sort

When to use it: Use this when time is short and you need to classify case facts quickly.

Write three labels in the margin: Corporate, Business, Functional.
Next to each, write its question: what businesses, how to compete, how to support.
Tag each key case fact with one label.
Write A, C, I beside the facts that show analysis, choice or implementation.
Build your answer by label, one case-linked point each, then add a one-line link showing how the levels fit.

Common mistakes in What is Strategy? Levels and Strategic Management

Defining strategy in general terms with no link to the case.
Students remember textbook definitions and feel safe writing them.
Fix: Give a short definition in one sentence, then spend the rest of the answer on case facts.
Mixing up corporate and business level strategy.
Both sound like big decisions, and small companies have one business.
Fix: Ask: is this about which businesses to hold, or how to win in one market? The first is corporate, the second is business.
Calling operational or budget decisions strategic.
Any important decision feels strategic.
Fix: Test for long-term impact, wide scope and difficulty of reversal. Routine functional actions are operational.
Treating analysis, choice and implementation as a strict one-way sequence.
Textbook diagrams show neat arrows.
Fix: State that the stages overlap and feed back on each other, especially when the environment changes.
Ignoring implementation when advising on a choice.
Analysis and choice are more interesting, and time runs out.
Fix: Always add a short point on structure, people, resources, change and control for the option you recommend.
Forgetting the level of the person in the task.
Students write the same answer regardless of the audience.
Fix: Match the content and tone to the reader, such as a board member who needs corporate level advice, and keep the professional skills in view.

Worked examples

Example 1

A group owns a budget airline, a hotel chain and a travel app. The board is considering selling the hotel chain. The airline's marketing team plans a low-fare promotion. Identify the level of strategy each decision belongs to and explain why.

Show the solution

Selling the hotel chain decides which businesses the group holds. That is scope of the whole group.
Scope and portfolio decisions are corporate level strategy.
The airline's promotion is about how the airline competes for customers in its market, using price.
Competing in one market is business level strategy. The promotion is a tactic that supports a low-cost position.
If the marketing team is just running the campaign, that is functional execution of the business strategy, so note both.

Answer: The hotel sale is corporate level because it changes the group's portfolio. The airline promotion is business level in its aim, which is competitive advantage on price, and functional level in how marketing carries it out. The two must fit the corporate plan for the group.

Example 2

A retailer has researched its market and decided to open stores in a new country, but the sales director complains that no staff, systems or budget have been agreed. Using the strategic management process, explain what is wrong and what to do.

Show the solution

Name the process: analysis, choice, implementation.
The research and the decision to enter a new country show analysis and choice are done.
The missing staff, systems and budget show implementation has not been planned.
Explain the risk: a good choice fails if it is not resourced or managed. Delay and cost overruns are likely.
Recommend actions: set up a plan for structure and people, allocate budget, set milestones and control measures, and manage the change.
Add that results should feed back into analysis, since the new market may differ from the research.

Answer: Analysis and choice are complete, but implementation is missing. The retailer should plan resources, people, systems, timing and controls before it commits, and then review the results against the original analysis.

Exam tips

SBL rewards application. Use the process and levels as a structure, but every point must carry a case fact.
Label your headings clearly with the three levels or three stages so the marker can award marks quickly.
Look for where the case shows a gap, such as strong analysis but weak implementation, and build your advice around it.
Show professional skills by matching tone and format to the reader, such as a short report for the board.
Keep definitions to one or two sentences. Marks come from analysis and judgement.

Practice questions from Concepts of strategy

What is Strategy? Levels and Strategic Management in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

What is Strategy? Levels and Strategic Management: frequently asked questions

What is strategy in ACCA SBL?

Strategy is the long-term direction and scope of an organisation that helps it gain advantage and meet stakeholder needs. In SBL you must apply it to the case, not just define it. Link every point to the organisation's facts.

What is the difference between corporate and business level strategy?

Corporate level strategy decides which businesses or markets the organisation should be in and how the centre adds value. Business level strategy decides how to compete in a particular market. A single-business firm has both, but they are still different questions.

What are the stages of the strategic management process?

The stages are strategic analysis, strategic choice and strategic implementation. Analysis examines the environment, resources and purpose. Choice generates and evaluates options. Implementation puts the chosen strategy into action and controls it.

Is functional strategy really strategy?

Yes, but it supports the higher levels. Functional strategies show how finance, marketing, HR, IT and operations deliver the business strategy. They matter because poor fit between functions and strategy is a common cause of failure.