The Peculiarities of Different Types of Corporate-level Strategies

Corporate-level strategies are used to define a plan to hit a specific target needed to achieve business goals. Business owners need targeted corporate level strategies to position themselves for success in both the short and long term. That being said, these strategies tend to be long-term in nature, but allow for dynamic adjustments, based on uncertainty and changing market conditions. In other words, business owners put these strategies to use for the long term end goal, but they also know that changes will often be made based on different changing factors. Corporate-level strategies are implemented throughout the entire organizational structure. Different strategies might be simultaneously used by business owners, but they may be set at different priority levels, based on what the owner sees as most important. As we know, there are different types of corporate-level strategies.

The most basic strategy is the diversification strategy, which focuses on firms that operate in different and unique product markets. If I owned my own business, I would want to put in place a corporate-level strategy because a corporate strategy would both state the outcomes my company intends to achieve and devises the means for it to do so. In other words, a corporate strategy would help to determines the scope of my company’s activities and the manner in which my company’s business processes support company goals. In doing this, the firm is able to create value and aggregate returns across all the firm’s business. More aggregate returns and value than there would be without the strategy in place. Furthermore, I would use this strategy to drive performance and establish the expectations of internal and external stakeholders, or those with an interest in the success of my company.

The strategy that I would use for my company would be a unrelated diversification strategy. This strategy is used for highly diversified firms with no relationships between its business. My company would have conglomerates that extend in many different industries such as cosmetics, soda, zoos and maybe even fashion. These businesses are unrelated to each other, and because they’re so different, I would make no attempt to share activities or competencies between them. Each business would have its own functions and competencies. This strategy allows for a business to increase revenues and decrease costs through financial economies.

Financial economies are costs savings found through improved allocations of financial resources based on investments. Risk can also be reduced by utilizing this strategy, By having many unrelated firms, I would have a portfolio with business with many different risk indexes, therefore if one business were to fail, my entire firm could still likely stay afloat. Although this type of business strategy could be difficult because it is much less cohesive and much more diverse, with the right acquisitions and individual competencies for each industry, a firm can create a lot of value while also reducing risk.