What is Corporate Strategy and its Types
What is Corporate Strategy?
Corporate strategy refers to a general strategy of any company focusing on its business portfolio to enhance its overall value. Before you start planning a corporate strategy, you should try to define leadership. When you understand ‘what is corporate strategy’, you will know that it focuses on identifying problems in different business areas.
The responsibility of formulating a corporate strategy lies with the top-level executives of a company. They discuss what is corporate strategy and analyze various factors before finalizing one. The primary pillar of the corporate strategy includes portfolio management, resource allocation, organizational design, and more.
While formulating a corporate strategy, you need to understand how different businesses are connected. You also need to figure out the impact of one business on another, along with the structure and functionality of the main company.
Remember that the corporate strategy is crucial for improving the management, procedure, and human capital of an organization, no matter which industry it operates in. Continue browsing to learn more about types of corporate strategies, what is corporate strategy through real-life examples, and more.
Corporate Strategy Vs. Business Strategy
The corporate strategy plan refers to the top management plan surrounding the entire organization. It is usually the master plan that leads to the long-term success of an organization. But what is a business strategy?
It refers to a specific action plan that enables organizations to achieve a certain organizational goal or target. Since the corporate strategy impacts an entire organization, the business strategy usually addresses its concerns.
While the business strategy helps attract new investors, it also familiarizes creditors with the financial health of the organization. Let’s figure out the key differences between the corporate strategy and the business strategy.
| Factor | Corporate Strategy | Business Strategy |
| Purpose | The corporate strategy includes the ultimate goals of an organization. To learn ‘what is corporate strategy,’ you should check out the mission statement of an organization. | The business strategy is usually designed to improve the overall performance of the company. |
| Designed by | The corporate strategy is planned by managing directors, top-level management, board of directors, and CEOs of a company. | The business strategy is usually formulated by mid-level and departmental managers. |
| Nature | The corporate strategy has a legislative and deterministic nature. | The business strategy has a governing and executive nature. |
| Time Length | The corporate strategy aims to fulfill long-term organizational goals. | The business strategy aims to fulfill short-term goals. |
| Goal | The corporate strategy chooses a competitive business for the organization. | The business strategy involves choosing a business plan that fulfills the goal of an organization. |
| Main Concern | The corporate strategy is focused on the entire organization and the different departments within it. | If you know “what is business strategy”, you will know that it is concerned with a specific department or division. |
| Focus | The corporate strategy focuses on organizational growth and profitability. | The business strategy aims to make an organization competitive in the market. |
| Approach | The corporate strategy has an extroverted approach and deals with the business environment. | The business strategy has an introverted approach that deals with the internal functionality of an organization. |
| Strategies Implemented | To understand what is corporate strategy, you should know that it revolves around expansion, stability, retrenchment, and more. | The business strategy revolves around focus, differentiation, cost leadership, and more. |
Types of Corporate Strategies
Once you define leadership within an organization, it will be easier for you to set up a corporate strategy. Some popular corporate strategy types that you should become familiar with are as follows:
- Stability strategy: It revolves around maintaining the current market position and share by serving in the same industry with existing products and services. It is one of the corporate strategy types that offers modest and sustainable growth.
- Expansion strategy: It involves introducing a new line of products or services, expanding services into different markets, and more. It is one of the corporate strategy types that revolves around innovation.
- Retrenchment strategy: It is one of the corporate strategy types designed to reduce losses. Among all the corporate strategy types, this is the least used.
- Combination strategy: It involves mixing different corporate strategy types instead of focusing on only one. Large organizations and MNCs usually use a combination strategy.
Examples of Corporate Strategy
Now that you know ‘what is corporate strategy’ and its different types, you should understand more about it from real-life examples.
The acquisition of Instagram by Facebook in 2012 is an example of a great corporate strategy. In this case, your answer to what is corporate strategy is eliminating a strong competitor from the market. Facebook continues to make strategic acquisitions, which is evident from its takeover of WhatsApp.
Walmart
Almost everyone is aware of the large hypermarket chain in the US. Their corporate strategy revolves around expanding beyond the retail sector. They have introduced Walmart, a subscription-based service offering benefits like free shipping and unlimited grocery deliveries. They have also set up health clinics to offer affordable medical services. Furthermore, they have established a fintech startup to offer financial products at reasonable rates.
Leadership Courses from Emeritus India
Every organization needs future-ready leadership and managerial talent to fulfill goals and drive future growth. Proper business management refers to adapting to the latest technologies, changing demographics, and growing customer expectations. Thriving in a constantly evolving workplace demands using data and analytics while maintaining an innovative mindset.
However, several organizations are facing a skill gap when it comes to executive leadership and management. Emeritus India has introduced some of the best business management courses online in an attempt to bridge the skill gap. The advanced business management courses will make the transition into a managerial role smooth and exciting.
The business management courses online are designed with a combination of online lectures, projects, group discussions, peer-to-peer learning, and more. The courses cover in-demand topics like business management, strategic management, general management, different types of leadership, and more. Moreover, the courses are offered in collaboration with top institutions of the world, including ISB, IIM, and IIT.
To Conclude
The corporate strategy is involved at different levels of an organization and focuses on overall growth and long-term goals. The structural approach helps with maximizing profits and identifying problems in operations.
Like different types of leadership, you will also come across different types of corporate strategies. You need to figure out the right type of corporate strategy for your brand and build one accordingly.
