Corporate-level strategies are those taken by business owners to achieve business goals. As such, they are generally long-term plans but must be adaptable and flexible to accommodate the ever-changing nature of business.
Since corporate-level strategies involve the actions of people throughout the organisation, such policies affect each part of a business. From a bird’s eye view, these strategies consist of three seemingly simple steps, namely:
This seems simple enough, but as someone who runs a business, you know that there is more to it. First, we will look briefly to define the different types of business strategy, and then we will venture more in-depth to learn about every kind of corporate-level strategy so that you can choose what is best for you.
There are different types of business strategies that involve different players and occur at various levels within an organisation. Let’s take a look:
1. Corporate Level: This is the broadest of the three and most high level. Here, you define your mission statement and value proposition or why your company exists. With these goals in mind, you can help to identify both your business and functional level strategies, as well as outline what you see for the future of your business.
2. Business Level: At this level, you take a look at the market and your competition. You define what sets you apart from the competition and evaluate the niche markets you are involved with to ensure it makes sense to remain in said market. Sometimes, it’s best to try and compete, but it could also prove that a market isn’t serving your organisation or helping to achieve your corporate-level goals. As such, it may be a better move to focus your time and energy on different business units within your organisation.
3. Functional Level: Now, we are in the nitty-gritty working elements of things. It is at this level where you define how operations are to be performed within your organisation. Thus, you should make sure that your processes are designed to help achieve your business and corporate-level strategies and goals.
When running a business or overseeing its working from a high level, you have to have a grasp on everything that is happening internally and externally.
To stay relevant in a competitive market, you’ll want to have a handle on these different strategies and use insights from data, the market and your employees to know what approach to employ and when.
Business Diversification Strategy: When growth has peaked within a business, diversification strategy looks at how to market and sell different (or new) products and services. This can happen at either the corporate level or business level, but the overall goal remains the same - increase profits. There are different types of business diversification, namely:
Of course, conglomerate diversification is the riskiest because it involves the introduction of something new and unrelated to how the organisation has already positioned itself within its market. Like any diversification, one of the main goals is also to mitigate risk to increase profits. In the marketplace, this strategy can help to beat the competition, increase profits, and protect a company from a market downturn.
Business Growth Strategy/ Concentration: This strategy helps to solidify a business within its market and beat the competition.
Business Stability Strategy: This strategy is less risky than those mentioned above. It is a mentality that is used for business maintenance more than growth. Under the umbrella of business, stability strategy comes three different types, including No-Change, Profit and Pause/Process with Caution.
Retrenchment Strategy: This strategy is employed when a business wants to reduce its operations to cut expenses. When minimising a business’ existing offerings, one of three approaches may be applied:
As you can see from the types of corporate-level strategy above, these are long-term and complex workings. They aren’t decisions that are made in a day and implemented immediately. Instead, the best types of corporate-level strategies are well planned and proven with the help of data and information, as well as input from middle and lower-level personnel within the organisation. Since they come from the top down, they should be designed to achieve business goals.
It goes without saying that to shape strategy effectively, data is imperative. Data provides your organisation with different angles and insights, allowing you to see where you have been, what is working, and where you are headed, along with providing you with information that can help avoid risks. The more advanced data aggregation and analytics you can capture, the more informed your understanding of the business will be and the more clarity and confidence you can maintain with your corporate-level strategy.
The corporate level strategy enables a business to benefit in a variety of ways. Companies that implement the corporate strategy can:
Each business operates differently, and as such, these strategies will be beneficial at different places and times in a business’ life cycle. However, regardless of which strategy you choose to implement, all of them will have a similar goal in mind, which is to achieve business goals, maximise profitability and be successful.