Table of Contents
- What is a Corporate-Level Strategy?
- Purpose of a Corporate-Level Strategy
- Characteristics of a Corporate-Level Strategy
- Corporate-Level Strategy Examples
- Lesson Summary
What is corporate level strategy? The corporate level strategy definition in the business world is when a company analyzes its entire business and determines its direction to increase growth or value. Corporate-level strategy is important for companies to develop and accomplish long-term goals. Corporate-level strategy can help companies take advantage of the market or their industry, and it is vital to the decision-making process. Part of the strategy will be to establish objectives that the company needs to meet and motivate all employees to help meet these goals. A corporate-level strategy can be created and implemented at any time in a company's lifetime, but it is important to have one established during its creation. The company needs a template to navigate the business world and adapt the corporate level strategy to respond to events throughout the company's lifetime.
The purpose of a corporate-level strategy is to increase the value of a company, create strategic goals, motivate the workforce, find ways to increase market share against competitors, and develop creative marketing techniques. The corporate level strategy also helps maximize profitability by outlining plans to increase revenue while keeping costs down. Strategies should also include how to beat the competition and what the company can use to give itself a competitive advantage.
There are several characteristics or components of a corporate-level strategy. The most generally accepted components are visioning, objective setting, resource allocation, and prioritization.
Corporate level strategy examples usually include two important topics: Focusing on a Single Industry and Reducing Organization Size.
When a new business emerges, most companies focus on a single industry. This focus happens because the company leaders have a specific niche with which they feel a competitive advantage. A company with a detailed and organized corporate-level strategy increases its competitive advantage over its competitors. The company also has an opportunity to specialize in this industry and become an expert in producing and distributing a product or service. The downside to this is it hurts diversification for the company. Focusing on one industry limits the opportunities of being in other industries. When operating in a single industry, a company could miss out on expanding its product line.
Reducing the size of their business allows them to improve performance by focusing on their original product, which could help the company get out of debt, decrease costs, and increase profitability. Reducing the size can also benefit communication. Since there are fewer people involved, it becomes easier to communicate to the different areas of the company. Reducing organization size also has its negative components. Downsizing can eliminate personnel who might have been crucial to the company's future. Reducing size also greatly restricts the possibility of growing or integrating.
A corporate level strategy is a business decision, or series of decisions, that greatly impact the company's future. A corporate-level strategy affects management, human resources, and finances. The four widely used components of the corporate-level strategy are visioning, objective setting, resource allocation, and prioritization or tradeoffs. Companies that construct a solid corporate-level strategy increase their competitive advantage. A corporate-level strategy may involve expanding to increase their market share and eliminate competition. One way to expand is through vertical integration, which allows the company to buy out one of its suppliers to help generate more profit and lower company costs.
Two commonly experienced corporate level strategy examples focus on a single industry and reduce organization size. A strategy that most new companies use when starting is selecting a single industry to become experts in and have an advantage. Reducing the size of their business as a corporate-level strategy is a great way to improve performance.
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An example of a corporate-level strategy would be a leadership meeting planning out 5-year goals. The 5-year goals can include how many sales they wish to accomplish by then or how many employees they desire to get to.
Corporate-level strategy means the overall plan for the future of the business. The strategy involves decision-making for financials, employees, management, and goals for the company.
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