In the professional world, developing a sound corporate strategy is extremely crucial. Not only is it concerned with the entirety of a business, it also makes room for continuous growth and development. If you want to see your organization succeed, it’s critical to engage in the strategic development process and take well-informed decisions that contribute to its growth.
Read on to understand the meaning of corporate strategy and its various types, pivotal for meeting business demands and expectations.
What Is A Corporate Strategy?
In its most basic form, a corporate strategy is a strategic plan of an organization that entails a clearly defined and long-term vision. It aims to create corporate value, promote workplace culture and motivate the workforce to take appropriate actions toward achieving overall objectives. 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.
Developing a successful and well-informed strategy required continuous efforts and thoughtful attention. There are three key areas that every organization should consider as they plan their strategy:
Setting a clear and well-defined long-term vision that motivates teams and grabs the attention of investors
Defining a portfolio strategy that allows businesses to realize the vision (for example, where to expand)
Establishing corporate processes and policies that reflect the organization’s commitment
What is a corporate strategy without changes? In today’s volatile work environments, the definition of corporate strategy is rooted in its continuity, that is, it’s an ongoing process. If you want to keep pace with ever-changing industry demands, you need to revisit and update your strategies.
Explore Different Corporate Strategies Examples
As already discussed, the concept of corporate strategy isn’t limited by its definition. In fact, there are different types of corporate strategies and no two strategies are the same. Here are some corporate strategies examples that’ll help explore the various types.
Growth Corporate Strategy
As the name suggests, it aims to achieve increased business growth in terms of revenue, market share and market penetration. Some areas where an organization can focus its efforts for growth include:
Concentration, where an organization can focus its efforts in the same areas it’s currently operating in
Diversification, where the organization can introduce new offers or services, or even move to entirely different business areas
Stability Corporate Strategy
Such strategies are geared towards getting more out of the current business. It’s because the current strategy works best for the organization and they want to maintain their performance. There are two types of stability strategies:
Status quo, where the focus is on maintaining the current levels of performance
Profitability-driven, where the focus is on boosting the organization’s evaluation (for example, before an initial public offering or selling the business)
Retrenchment Corporate Strategy
The main objective is to improve an organization’s brand image or market position through aggressive changes such as:
Turnaround, create a dramatic change in the course of action
Divestiture, also known as getting rid of or cutting off the parts that lead to poor business performance
Reinvention Corporate Strategy
As the name suggests, this strategy involves reinventing an existing business that hasn’t changed for decades, often with new technological support. The strategies can be:
Evolutionary, where the business model doesn’t change much but the way a product or service gets delivered is revamped
Revolutionary, where the entire business model undergoes change, often leading to changes in market dynamics
The importance of a corporate strategy is rooted in the way an organization makes use of available resources and capabilities to achieve overall objectives.
Establish Trust For A Healthy Corporate Strategy
Often, team leaders and managers shoulder the responsibility of driving peak performance and achieving organizational goals. Therefore, strategic management and planning are closely tied to leadership development. However, if you want to reap the benefit of creating a solid corporate strategy plan, you need to get everyone on the same page.
Harappa’s Establishing Trust course is designed to help you build trust-rich relationships by focusing on credibility and openness, honoring commitments, being empathetic, and prioritizing the needs of your team. Frameworks such as the Trust Equation and Three Pillars of Trust will help you build and maintain trustworthiness with authenticity and empathy. Be a winner at the workplace with Harappa!
Explore Harappa Diaries to learn more about topics such as Collaborative Learning, What Is Strategic Management Process, Functional Strategy and the Process Of Strategic Decision Making to become a well-rounded professional.
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