Put it simply, a strategy is simply a plan to achieve something. A corporate strategy is an elaborate plan that a company develops to realize or achieve its vision or objectives. There could be more than one strategy for a company and these strategies help in realizing the objectives of the company such as establishing itself on the frontier of the industry it belongs to or outrun its competitors to produce the best products or services, etc. It must be noted that while some strategies succeed, others can fail. So, corporate strategists must be very careful in planning their strategy.
So, this brings us to a question. Does corporate strategy very important in today’s business world? The answer, not surprisingly is yes. In today’s world of ever-changing landscape of business, where the business environment is full of cut-throat competition, ever-changing tastes and preferences of customers, a company needs to have or plan strategies in such a way that they should be able to look into future and plan a product or service strategy accordingly. This concept gave rise to we all know today as marketing. This is a challenge in itself as the future is highly unpredictable and cannot be controlled.
Thus, business organizations need to fine tune themselves in accordance with the ever-changing business landscape. In other words, the organization must be highly competitive and should first in launching products or services before their competitors do. This requires a highly proactive system within an organization that makes changes rather than shifts according to the changes.
Corporate strategy involves taking the right decisions at the right time by the top level management. According to Michael Porter, corporate strategy involves, “creating a unique and valuable position, making trade-offs by choosing ‘what not to do’, and creating ‘fit’ by aligning company activities to with one another to support the chosen strategy”.
The biggest challenge for corporate strategy in any business or any company is answer the question, “what business should we be doing?” After the decision about the business that is to be done is taken, the subsequent questions like how to, when to, what to, etc are answered by the situations the company is in. These situations include the financial situation, the human resource situation, the socio-political situation, etc.
Organizations grossly operate in environments which are stable and unstable. While stable environments or markets, everything moves in a pattern that can be plotted. In such environments, taking into account historical or current data can be useful. In unstable environments or markets, it is hard to find patterns or patterns might not exist at all. In such situations, a careful future analysis is required. In such unstable environments, a study of the major factors influencing the markets should be done first and how these factors can turn favorable should be noted. For this purpose, several analyses such as PESTLE Analysis, SWOT Analysis, market audit, etc can be done.
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