Corporate Strategy

CORPORATE STRATEGY

Corporate strategy tells us primarily about the choice of direction for the firm as a whole. In a large multi business company, however, corporate strategy is also about managing various product lines and business units for maximum value. Even though each product line or business unit has its own competitive or cooperative strategy that it uses to obtain its own competitive advantage in the market place, the corporation must coordinate these difference business strategies so that the corporation as a whole succeeds.

Corporate strategy includes decision regarding the flow of financial and other resources to and from a company’s product line and business units. Through a series of coordinating devices, a company transfers skills and capabilities developed in one unit to other units that need such resources.

A corporation’s l strategy is composed of three general orientations (also called grand strategies):

A) Growth strategies expand the company’s activities.

B) Stability strategies make no change to the company’s current activities.

C) Retrenchment strategies reduce the company’s level of activities.

D) Combination strategies is the combination of the above three strategies.