What strategic decisions must be made when selecting corporate strategies?
A corporate strategy refers to a companywide strategy aligned with the company’s vision and objectives, aiming to create value and increase profit. It considers an organization’s overall nature, ecosystem, and ambition. It aligns with the optimum utilization and allocation of resources. Show
It can work as a blueprint for the whole organization to minimize risk and maximize the growth and expansion of the organization by bringing effective administration, management, and centralization of business operations. Furthermore, it aims to attain long-term growth by gaining competitive advantages. Table of contents
Key Takeaways
Corporate Strategy ExplainedCorporate strategy portrays a general strategy in a company and focuses on its business portfolio to add more value. Its planning involves focusing on the organization’s structure and identifying the problems in different business areas. The responsibility for appropriate strategy formulation lies with the top-level managers of the company. They discuss, analyze and finalize strategies to move forward in the market. The main pillars of corporate strategy are the allocation of resources, organizational design, portfolio management, and prioritization (strategic trade-off). Resource allocation involves the efficient allocation of human and capital resources. Organizational design explains how the organization operates to achieve its aims. Portfolio management strategies involve optimizing the portfolio per the company’s strategic objectives. Finally, prioritization or strategic trade-off demands the design of an optimal strategic mix by balancing risk and return to meet the company’s objectives. TypesCommon types of the corporate strategies are the following: You are free to use this image on your website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked Stability Strategy
Expansion Strategy
Retrenchment Strategy
Combination Strategy
Examples
Corporate Strategy vs. Business StrategyCorporate StrategyBusiness StrategyThe whole organization is the subjectSurrounds a specific unitIt includes top-level decision-making to develop strategies in line with the company’s vision and objectivesBusiness strategies are developed at the business unit levelStreamlines the company in achieving its long-term objectivesImportance is given to achieving the objectives of business unitsDesigned for the company’s growth and profitDesigned to increase customer base and attain a competitive edgeThe decision-making majorly involves the people from top-level management like the CEO, COO, and MDThe decision-making involves mostly middle-level managersLong-term in natureShort-term in natureExpansion through vertical integration is an exampleProduct differentiation is an exampleFrequently Asked Questions (FAQs)What is the corporate strategy level? In an organization, strategies are tiered into three sections: corporate, business, and functional. The corporate level is filled with the following: What is a strategic business unit? It refers to a business unit of a large business or corporation, and it is managed separately. Strategic business units or SBUs are examples of profit centers and are responsible for making a profit by focusing primarily on product offerings and market segments. What are corporate strategy examples? Examples include vertical integration decisions, strategies to maintain current market share, acquisitions to enter a new sector, strategies to increase profit, and methods to reduce loss. Recommended ArticlesThis has been a Guide to what is Corporate Strategy and its definition. We explain its levels, examples, types, and vs. business strategy. You can learn more from the following articles – What are the major types of decisions that are made in the process of corporate strategy?Key corporate strategy decisions may include whether to enter, retain, or exit a given business; whether to pursue growth internally or externally, i.e. through alliances or acquisitions; and how to allocate resources within a portfolio.
What factors should a business consider when selecting a strategy?Factors to Consider in your Strategic Plan. Articulate a vision and a mission. ... . Identify your stakeholders. ... . Scan your internal environment. ... . Assess your external environment. ... . Combine the strengths, weaknesses, opportunities and threats (SWOT) assessment into a single analysis. ... . Define your competitive advantage.. What is strategic choice in corporate strategy?Strategic choice refers to the decision which determines the future strategy of a firm. It addresses the question “Where shall we go”. A SWOT analysis is conducted to examine the strengths and weaknesses of the firm and opportunities that can be exploited are also determined.
Why decisionOne of the most outshining benefits of strategic decision-making is that when these decisions translate into action, they improve your organization's efficiency. Deciding the course of your future actions sets the tone for the entire organization. A farsighted approach helps mitigate future risks.
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