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Corporate Strategy

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What Is Corporate Strategy?

A corporate strategy is one that determines what businesses a company is in or wants to be in, and what it wants to do with those businesses.








What Are the Types of Corporate Strategy?


  • Growth Strategy
  • Stability Strategy
  • Renewal Strategy



GROWTH STRATEGY A growth strategy is when an organization expands the number of markets served or products offered, either through its current business(es) or through new business(es). Because of its growth strategy, an organization may increase revenues, the number of employees, or market share. Organizations grow by using concentration, vertical integration, horizontal integration, or diversification.



STABILITY STRATEGY  A stability strategy is a corporate strategy in which an organization continues to do what it is currently doing. Examples of this strategy include continuing to serve the same clients by offering the same product or service, maintaining market share, and sustaining the organization’s current business operations. The organization doesn’t grow, but doesn’t fall behind, either.



RENEWAL STRATEGY In 2009, Symantec lost $6.7 billion. Sprint-Nextel lost $2.4 billion, and many financial services and real-estate-related companies faced serious financial issues with huge losses. When an organization is in trouble, something needs to be done. Managers need to develop strategies, called renewal strategies, that address declining performance.


The two main types of renewal strategies are retrenchment and turnaround strategies.


A retrenchment strategy is a short-run renewal strategy used for minor performance problems. This strategy helps an organization stabilize operations, revitalize organizational resources and capabilities, and prepare to compete once again. When an organization’s problems are more serious, more drastic action—the turnaround strategy—is needed. Managers do two things for both renewal strategies: cut costs and restructure organizational operations. However, in a turnaround strategy, these measures are more extensive than in a retrenchment strategy.


 












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