Corporate Strategy

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INTRODUCTION
• In business, strategy means action -- The steps the business owner intends to take to
bring in new customers and stay ahead of current and prospective competitors.

• A small business has resources, including capital, the skills of its managers and
employees, its brand image and its capacity for innovation.

• Developing corporate strategy is the process of determining how best to deploy these
resources.

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DEFINITION
• Corporate strategy is a unique plan or framework that is long-term in nature, designed
with an objective to gain a competitive advantage over other market
participants while delivering both on customer/client and stakeholder promises (i.e.
shareholder value).

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TYPES
• Different types of corporate strategy:

• Growth Strategies - Growth strategies aim to achieve considerable business growth in the
areas of revenue, market share, penetration, etc.

• Stability Strategies.

• Retrenchment Strategies.

• Re-Invention Strategies.
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IMPORTANCE

• The importance of a corporate strategy hinges on its being an effective means to allocate
a company's resources establish business expectations and improve a company's
competitive position, as well as increase shareholder value to something beyond the sum
of its physical assets.

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EXAMPLES OF BUSINESS
STRATEGIES
• Cross-sell more products.
• Most innovative product or service.
• Grow sales from new products.
• Improve customer service.
• Cornering a young market.
• Product differentiation.
• Pricing strategies.
• Technological advantage.
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COMPONENTS
• There are several important components of corporate strategy that leaders of
organizations focus on. 
• The main tasks of corporate strategy are:
• Allocation of resources.
• Organizational design.
• Portfolio management.
• Strategic tradeoffs.

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LEVELS

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FUNCTIONS
• It provides a dual approach to problem solving.
• It focuses attention upon changes in the organizational set up, administration of
organizational process affecting behaviour and the development of effective leadership.
• It offers a technique to manage changes.
• It also offers a different way of thinking.
• It furnishes the management with a perspective whereby, the latter gives equal
importance to present and future opportunities.
• It provides the management with a mechanism to cope with highly complex environment
characterized by diversity of cultural, social, political and competitive forces.
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ADVANTAGES
• Increase of the profitability.
• Guides about business optimization.
• Offers a Strategic Direction.
• Improves Decision Making.
• Improves management skills.
• Minimizes the Risk.
• Provides sustainability.

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DISADVANTAGE
• Risk.

• Another major disadvantage to diversification is that it is the riskiest of all possible


marketing strategies.

• Since the corporation is selling new products in new markets it has neither the expertise
to produce and market those products nor the expertise to sell in those markets.

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SUMMARY
• Corporate strategy is a unique plan or framework that is long-term in nature, designed
with an objective to gain a competitive advantage over other market participants
while delivering both on customer/client and stakeholder promises (i.e. shareholder
value).

• Corporate strategy means a company’s vision and tactics to outperform its competition.

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