Hello friend,
It differes from one company to another. But usually
Level 1 team will be the Customer Support Team and they will be taking the users calls and assigning it to the respective teams based on the severity which the user wants to put the ticket on.
Level 2 will be the Production Support Team which handles day to day issues related to the business processes.
Level 3 is the development team and if Level 2 team finds some issues which can be corrected only through some configuration changes or some enhancements then Level 3 will come into picture.
Hope i am clear,
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