July 27, 2024
Strategic Management

Formulation Of Corporate level Strategy

by noteswa

Corporate level strategy

What is corporate level Strategy?

Corporate-level strategies are formulated by the top management of an organization. These strategies are mainly concerned with decisions regarding the product or service to produce and the geographical location to target.

In this aspect of strategy, we are concerned with broad decisions about the total organization’s scope and direction.

Corporate-level strategies give a direction to an organization to achieve its objectives. In addition, these strategies determine resource allocation, such as how to allocate cash and equipment’s among various departments. Decisions regarding expansion policies or addition of new products also fall within the area of corporate-level strategies. The area of corporate-level strategies also involves decisions regarding establishing relationships with other organizations and competing with the rival organizations.

major issues related to Corporate-level strategies

Corporate-level strategies deal with the following major issues:

  1. Dividing the resources among different operations of the organization
  2. Transmitting and transferring the resources from one set of businesses to another
  3. Selecting and managing the investment portfolio of an organization

Corporate-level strategies are formulated to fulfill the corporate objectives of the organization. These strategies are also known as grand strategies or master strategies. They specify the time period to achieve the long-run organizational objectives.

Types of Corporate level Strategy

There are four major grand strategies available to the organization. These strategies are also called grand strategic alternatives, and are listed in the following points:

  1. Expansion strategies
  2. Stability strategies
  3. Retrenchment strategies
  4. Combination strategies

Expansion strategy:

Expansion strategies are the most common and popular strategies adopted to accelerate the pace of growth of an organization.

These strategies have a great impact on the organization’s structure and processes. It widens the scope of the organization to expand customer groups, customer functions, and alternative technologies. Expansion strategies are also known as growth strategies.

Expansion strategies help in gaining control over market and competitors. These strategies are practiced when an organization demands increase in pace of activity, due to increase in large opportunities available in the market. If an organization exists in the business for a long time, it can gain advantage from its experience and go for expansion strategies. Similarly, if an organization’s resources are lying idle, it may utilize them for expansion purposes.

Expansion strategies are sub-divided into various strategies, as below

  1. Expansion through Concentration
  2. Expansion through Integration
  3. Expansion through Diversification
  4. Expansion through Cooperation
  5. Expansion through Internationalization
  6. Expansion through Digitalization

noteswa

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