The Walt Disney Studios is one the largest mass media and entertainment conglomerates in the world. Founded by Walter Elias Disney, popularly known as Walt Disney, this major film studio is widely known for its animated movies and productions. Over time, this film studio acquired other major studios such as Pixar and Marvel. Today, Disney produces some of the highest-grossing movies of all time.
The strategic move of acquiring Pixar and Marvel Studios, among others, has been extravagantly beneficial to Disney. This is an ideal example that highlights the importance of a corporate strategy. Read on to explore the meaning and benefits of a powerful corporate strategy.
Exploring The Meaning Of A Corporate Strategy
A corporate strategy is a strategic plan of an organization that entails a clearly defined and long-term vision. The process of creating a corporate strategy is to set out a basic plan with strategic goals and milestones for what’s to be achieved and when. It aims to create corporate value, promote workplace culture and motivate the workforce to take appropriate actions toward achieving overall objectives. Developing a successful and well-informed strategy required continuous efforts and thoughtful attention.
In today’s volatile work environments, if you want to keep pace with ever-changing industry demands, you need to keep updating your corporate strategy. Let’s explore the importance of a corporate strategy through this example:
Starbucks, the global coffee chain, acquired new businesses such as Teavana, Seattle Coffee and Ethos Water at every step of their supply chain. By owning more businesses, Starbucks gains greater control over the market and can make diverse decisions, from manufacturing to distribution. This is how several businesses stay ahead of the competition and ensure control through large market shares.
Looking At The Importance Of Corporate-Level Strategy
There are different types of corporate strategies that determine the success of an organization. Corporate-level strategies are developed by the highest level of management and they impact business growth and opportunities in the future. The importance of corporate-level strategy is rooted in its various types. Let’s see how these strategies make a difference:
1. Stability Strategy
Geared towards getting more out of the current business, stability strategies work best for organizations that want to maintain their performance. In other words, businesses want to maintain the status quo (current performance levels) and focus on boosting their valuation.
2. Expansion Strategy
Also known as growth strategy, this helps in achieving increased business growth. Whether it’s revenue, market share or market penetration, businesses prioritize concentration (focusing efforts in the same areas it’s currently operating in) or diversification (introducing new offerings or even moving to entirely different business areas).
3. Retrenchment Strategy
Here, the primary objective of an organization is to improve the brand image or market position. The strategy is aggressive and businesses often resort to turnaround (create a dramatic change in the course of action) or divestiture (getting rid of elements that led to poor business performance).
The Importance Of A Corporate Strategy In Current Times
There are several factors that contribute to the importance of a corporate strategy. However, the COVID-19 pandemic has played a pivotal role in shaping the way businesses approach strategic decision-making. Let’s see why implementing a strong corporate strategy is crucial for your business in these changing times:
1. Strategic Direction
Devising a corporate strategy prepares you for changing business environments. It helps anticipate risks and have a plan for responding to those risk factors. In short, you gain strategic direction for business development.
2. Informed Decision-Making
Decisions are the driving force of any organization. The importance of a corporate strategy lies in the way businesses make and enact decisions. They not only prepare organizations for unpleasant situations; they also motivate employees toward overall objectives.
3. Increased Sustainability
Corporate strategies are often developed with the goal of sustaining a business. In other words, if businesses want to survive the competitive market, they need to think about long-term development. A corporate strategy can measure the growth of your business and inform you whether investments and policies are relevant or not.
While designing a corporate strategy may be easy, getting everyone on the same page requires more time. If you want to convince stakeholders of your ideas, decisions and strategies, you need to win their confidence. Harappa’s Establishing Trust course will help you build trust-rich relationships by focusing on credibility and openness, honoring commitments, being empathetic, and prioritizing the needs of your team. Powerful frameworks such as the Trust Equation, the Three Pillars of Trust and the Trust Toolkit will help you engage and collaborate better. Prioritize the needs of your team and organization with Harappa today!
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