While strategy may be about competing and surviving as a firm, one can argue that products, not corporations compete, and products are developed by business units. The role of the corporation then is to manage its business units and products so that each is competitive and so that each contributes to corporate purposes.
Strategy is the direction and scope of an organization in a changing business environment through the configuration of its resources and competence with a view to meeting stakeholder expectation.
Characteristics of Strategy Long term in nature: The plan can be made in a short time, but the effect or impact it has on the organization is in the long term or in the forseeable future.
Strategy contains elements of uncertainty It is directed towards the goals of the organization Dynamic in nature Strategy affects the whole organization There are basically three different levels where strategy can be formulated, they are: Corporate level strategy Functional level strategy Today, we would be analyzing the corporate level strategies, with the other levels of strategy to come in subsequent posts.
I hope you enjoy. Corporate Strategy involves the careful analysis of the selection of businesses the company can successful compete in.
Corporate level strategies affect the entire organization and are considered delicate in the strategic planning process.
Characteristics of Corporate Strategy Corporate level strategies are formulated by the top management with inputs from middle level management and lower level management in the formulation process and designing of sub strategies Decisions are complex and affects the entire organization It is concerned with the efficient allocation and utilization of scarce resources for the benefit of the organization Corporate level strategies are mapped out around the goal and objectives of an organization.
They seek to translate these goals and objectives to reality Typical examples of decisions made are decisions on products and markets The three main types of corporate strategies are Growth strategies, stability strategies and retrenchment.
A growth strategy could be implemented by expanding operations both globally and locally; this is a growth strategy based on internal factors which can be achieved through internal economies of scale.
Aside from the illustration of internal growth strategies above, an organization can also grow externally through mergers, acquisitions and strategic alliances. The two basic growth strategies are concentration strategies and diversification strategies.
The company concentrates more resources on the product line to increase its participation in the value chain of the product. The two main types of concentration strategies are vertical growth strategy and horizontal growth strategy. As mentioned above, by utilizing this strategy, the company participates in the value chain of the product by either taking up the job of the supplier or distributor.
If the company assumes the function or the role previously taken up by a supplier, we call it backward integration, while it is called forward integration if a company assumes the function previously provided by a distributor. Horizontal growth is achieved by expanding operations into other geographical locations or by expanding the range of products or services offered in the existing market.
Diversification Strategy Richard Rummelt, a strategy guru at UCLA Anderson School of Management, is of the opinion that companies think about diversification strategies when growth has reached its peak and there is no opportunity for further growth in the original business of the company.
What then is this diversification strategy we speak of? A company is diversified when it is in two or more lines of business operating in distinct and diverse market environments.
Two basic types of diversification strategies are concentric and conglomerate. This is also called related diversification. It involves the diversification of a company into a related industry.
|Buy Business-Level and Corporate-Level Strategies essay paper online||Corporate-level strategies define a plan to hit a specific target needed to achieve business goals. Strategies tend to be long-term in nature, but allow for dynamic adjustments, based on uncertainty and changing market conditions.|
This is also called unrelated diversification; it involves the diversification of a company into an industry unrelated to its current industry.
This type of diversification strategy is often utilized by companies in saturated industries believed to be unattractive, and without the knowledge or skill it could transfer to related products or services in other industries.
Stability Strategy Stability strategies are mostly utilized by successful organizations operating in a reasonably predictable environment.
It involves maintaining the current strategy that brought it success with little or no change. There are three basic types of stability strategies, they are: When a company adopts this strategy, it indicates that the company is very much happy with the current operations, and would like to continue with the present strategy.
In using this strategy, the company tries to sustain its profitability through artificial means which may include aggressive cost cutting and raising sales prices, selling of investments or assets, and removing non-core businesses. The profit strategy is useful in two instances: This strategy is used to test the waters before continuing with a full fledged strategy.Corporate level strategies are concerned with questions about what business to compete in, they affect the entire organization and are considered delicate in .
There are many differences between business strategy and corporate strategy which we have presented in this article. At business level, the strategies are more about developing and sustaining competitive advantage for the products offered by the enterprise.
It is concerned with positioning the business against competitors, in the marketplace. Business-level strategy is concerned with a firm's position in an industry, relative to competitors and to the five forces of competition. Customers are the foundation or essence of .
Corporate strategy is the highest level of strategy followed by business level strategy and finally functional level strategy.
Each of these is explained in this article. There are various levels of strategy in an organization - corporate level, business level, and functional level.
Definition of Corporate Strategy. Corporate Strategy can be explained as the management plan formulated by the highest level of organization echelon, to .
Jun 30, · Small businesses contemplating diversification, on the other hand, face a raft of additional corporate-strategy decisions, as well as business-level decisions for the new business unit, should it.