Each company needs a strategy that will deal with the entire strategic scope of the organization. It’s a bigger picture of the company and its business goals that can help business owners decide which region to operate in and how markets promote their products and services.
If you’re running a multi-business firm, how you allocate your resources, equipment, staffing, and money greatly determines your level of success. For such companies, the resource allocation process is typically established at the corporate level.
In other words, you need a corporate-level strategy to make sound strategic decisions.
This strategy allows you to gain a competitive advantage by carefully selecting and managing the general direction that your company is moving in. Let’s see some of the types and examples of such strategies in management.
Growth and Expansion
Each business wants to grow and expand to new markets. Business growth is probably one of the most vital goals that every company pursues. However, there is an extensive range of ways to grow your business, and many organizations find it challenging to choose the best option for achieving their growth goals.
If your business landscape is volatile, knowing how to grow your business is vital as it allows you to use the advantages your competitors don’t have. Since it’s essential to scale your operations according to your growth, let’s look at some examples to achieve this corporate-level goal.
Probably the most common corporate strategy in strategic management, vertical growth involves pushing the capabilities of your organization to the maximum to gain control over your costs and supply chain. This corporate strategy allows you to increase your products’ quality and the price to build your brand presence, image, and reputation.
This type of strategy is the perfect example of how to expand your business into new markets. Use your functional and business systems to identify unique needs and target audiences. Before you develop into a new area, you must first determine the ideal demographics to see if there is potential for expansion.
If there is, you can start your horizontal growth phase by determining day-to-day business activities to achieve your new business growth goals.
If you’re happy with the current state of things, you’ll do everything you can to keep things that way. That’s what stability strategies are about – keeping your business up and running. With that in mind, let’s take a look at some of the best examples of stability strategies.
You can’t grow your business without maximizing your profits. Many organizations fail because they don’t have sufficient means to support their growth plans. You can maximize your profits in many different ways, including identifying inefficiencies, refining processes, raising prices, cutting costs, etc.
However, cutting costs isn’t a popular way to go as it can do more harm than good if you miss your costs too severely or abruptly. We recommend some caution when using this particular type of corporate-level strategy.
Keeping Your Stability
Since the last thing you want for your business is to stagnate, keeping things as they are, smooth and functioning, is also an effective strategy that leads to profitability. Keeping things stable is an excellent way to reduce your business risk and keep your costs low.
However, you should also look to reinvest in your business areas that have already given successful results and look for new opportunities.
The world of business is continually fluctuating. Organizations have their ups and downs – it’s just the way things are. If things aren’t going too well for your business, it’s time to regroup, and that’s where retrenchment strategies come into play. There are three types of retrenchment strategies:
- Turnaround – turnaround is the first step you should take to save your business if things are going down south. This strategy focuses on efficiency so that you can identify the weakness in your organization that keeps you from going forward. It helps eliminate any inefficiencies that cause you to lose money, customers, and profits.
- Divestment – If your organization’s particular department is dragging the whole business down, it’s time to cut it loose. You can do that by spinning it off or selling it to a third party as an asset to raise new capital for your core organization.
- Liquidation – if there’s simply no way to keep going and you’re about to see your business end, it’s time to stop struggling and liquidate your operations.
While all these strategies are useful tools that are meant to help you run your business more smoothly by being prepared for whatever may come, their main goal is to show you that there’s always more than one solution to any corporate problem.
In the end, the trick is to know which strategy type to use at the right moment. If you use these strategies to plan things and move your business forward, getting ahead of the competition curve will be much easier. Corporate-level techniques help your business stay afloat, efficient, and profitable.