Monday, 16 December 2019

Unit 7: Corporate Level Strategies

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Unit 7: Corporate Level Strategies  

Strategy is the direction and scope of an organisation over the long-term.

Strategies achieve advantages for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.

Strategies exist at several levels in any organisation – ranging from the overall business through to individuals working in it.

Strategic Management   Growth strategies are the most widely pursued corporate strategies.

Without moving outside the organisation's current range of products or services, it may be possible to attract customers by intensive advertising, and by realigning the product and market options available to the organisation.

These strategies are generally referred to as intensification or concentration strategies.

There are three important intensive strategies, viz.

Market penetration, Market development and Product development.

Integration basically means combining activities relating to the present activity of a firm.

Integration is basically of two types, viz. vertical integration and horizontal integration.

Diversification is the process of adding new businesses to the existing businesses of the company.

A company may pursue defense strategies when it has a weak competitive position in some or all of its product lines resulting in poor performance.

Retrenchment strategies are last resort strategies.

Companies can use any of the four retrenchment strategies- turnaround, divestment, bankruptcy and liquidation.

Firms can take the international route by exporting a part of their produce to other nations or by outsourcing a small chunk of their work outside.

Cooperative strategies such as strategic alliance and joint ventures are a logical and timely response to intense and rapid changes in economic activity, technology and globalisation.

Restructuring is another means by which the corporate office can add substantial value to a business.

Restructuring can involve changes in assets, capital structure or management.


Backward Integration: Gaining ownership or increased control of a firm's suppliers.

Corporate Strategy: primarily about the choice of direction for the corporation as a whole Diversification: process of adding new businesses to the existing businesses of the company Horizontal Integration: The strategy of seeking ownership or increased control over a firm's competitors.

Integration: Integration basically means combining activities relating to the present activity of a firm.

Intensive Strategy: firms intensify their efforts to boost sales and grow market share Market Development: seeks to increase market share by selling the present products in new markets Market Penetration: seeks to increase market share for existing products in the existing markets through greater marketing efforts.

Vertical Integration: Expanding the firm's range of activities backward into the sources of supply and/or forward into the distribution channels.

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