CORPORATE STRATEGY
| Figure 1 |
Corporate strategy is about participating in multiple business units and is defined as
diversification across structurally different industries. There is a thin line between corporate
strategy and individual business units. Business unit strategy is where profits are earned in an
organization. In business unit strategy, the drivers of industry profitability competitive
advantage of the firm within that particular business units or within that industry. But in
corporate strategy the organization should consider about the mix of the different industries
that the organization should be in? and how the company going to add value in each individual
unit, so the output is greater than the parts.
When organization brings a business unit into a
corporation the company might lose as much as 20% of value of that business by getting rid of
the autonomy of the business unit. Loading with extra layer of overhead, there must be more
than a compensating benefit that comes from the organization that justifies the diversification.
The goal of corporate strategy is to create superior long run performance for the organization
by adding back more value into the individual business units than they can achieve by being
on their own.
In practice all firms have a corporate strategy, even a single line company that rigorously
focused on doing one thing. And that single focus is a decision and the decision not to engage
in other industries is important to company’s performance. CEO are often focused with
corporate strategy. Because its high-level decision. CEO often are interesting in expanding the
size of their firm, expanding their span of control sometimes it’s very much aligned with the
interests of the board of directors and the investors where often business unit managers make
decision about the competitive positioning of the organization and each of the industries in
which it participate.
DIFFERENT BETWEEN BUSINESS UNIT AND CORPORATE STRATEGY
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| Figure 2 |
Corporate strategy focuses on an organization’s entire business unit portfolio. The big industry
and consumer trends affecting the organization and how resources are allocated across the
organization. Corporate strategy also responsible for the organization’s vision and mission
statements and managing investor relations. The head of a corporate strategy team will usually
report into CEO. Business unit strategy is focuses on understanding the changes the unit’s immediate business
environment and achieving competitive advantage by new business models, new segments,
new services, or new capabilities.
FACTORS THAT TRIGGER A CORPORATE STRATEGY
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| Figure 3 |
COMPONENTS OF CORPORATE STRATEGY
Corporate strategy work can be organized around four core components. Each of which may
be a higher priority than others at any point in time depending on what has triggered a corporate
strategy. The main components of corporate strategy are Allocation of resources,
Organizational design, Portfolio management, Strategic trade-offs.
ALLOCATION OF RESOURCES
Resources in organization includes financial resources of the business, like working capital,
intangible resources like reputation of the organization and goodwill, physical resources such
as machinery, equipment like raw materials, services, and human resources
which is necessary resource that activates everything in organization such as enabling
production and effective output.
As organization highly believes that at their human resources is what drives
the organization forward and positions their companies as recognized one in industry market. Companies aim to develop their employees very professionally as well as personally and do so
through their training programs and employee benefits, and ensure it important to offer
employees attractive working environments and forecasts for development.
Specially during economic fluctuations after pandemic organizations confronted in terms of
human resources management. Some prearranged events had to be adjourned. During this period of time companies even equipped staffs with computers, screens, headphones, cameras
and any other equipment needed for them to be able to work from home suitably, and IT support
was made accessible to employees working remotely. And even now most of the organizations running their work through remote work mode.
ORGANIZATIONAL DESIGN
Organization has various definitions around the globe but while there is diversity, there are
indeed some common elements of these definitions. Therefore, in an organization there are
multi-agent systems which means these could be representative agents who represent an entire
subgroup of people. Organization must have identifiable boundaries thus the organization
know where the system begins and ends. Organization should have existence of system level
goals.
PORTFOLIO MANAGEMENT
Portfolio Management is the selection, ordering and control of an organization’s programs. A
manager who is in charge of portfolio management have to select specify projects and programs
that will deliver the strategy that organization selected and to deliver the competence that will
allow those programs to carried within their specified time frame. Major goal of portfolio
management has to be balance risk and reward.
Generally in organization's Portfolio Corporate Management is
responsible for preparing the company's report, addressing inquiries the corporation receives
on associated topics, responding questions from stakeholders, and organizing the working
groups. The executives of portfolio management manage all applicable procedures and
procedures within the company's agenda: gaining visions, reviewing the material subjects on a
systematic basis, revising and recording the improvement of the company KPIs (Key Performance Indicator), reporting on
growth internally and externally. It is in charge of notifying other departments about company wide sustainability efforts and constant happenings and supports organization in identifying
risks and opportunities.
STRATEGIC TRADE OFF
Strategic Trade-offs include customer sections that organization will not be able to service, and
goods that are not an applicable fit to the organization portfolio. In an organization some of
trade-off decisions in development organization can make within their project teams. But there
are others that are way more strategic in nature. Therefore an organization may need additional
support.
For an example, organization can speed up their development progression or reduce
the risk if only organization ready to do partnering. But partnering is bigger strategic decision.
For these types of trade-off organization needs to work with management executives and
instructors. The instructors will help the organization to understand the strategic trade-offs and
help the team advance the cause. Risks are an essential part of organization's corporate atmosphere,
work, and organization progressions. For this purpose, company's management sustains a planned
procedure for risk management and control mechanisms, all under the direction of the
Company’s Board of Directors.
LINKED BETWEEN MARKETING STRATEGY AND CORPORATE
STRATEGY IN ORGANIZATION
| Figure 5 |
Corporate strategy is focused upon the significant objective of the corporation to accomplish
the highest sales or income usually gained by the creation of new customers, the retention of
existing and customer loyalty to the business. Therefore, businesses are expected to adopt
policies and strategies this led to sustainable development and performance. (Mattsson J, 2006)
Therefore, the corporate strategy is based on and pitched towards the accomplishment of the
company's main objectives.
Marketing strategies, on the other hand, are core characteristics of
corporate strategy that rely principally on customer behavior, knowing and reacting
successfully to their requirements and aims than rivals. The organization plan includes various
functions: task identification, priorities and group goals, supply to divisions of available
capital, establishment of the corporate object and policy development that directs each
organisation's activity. In accordance with the overall brand policy, core skills and value chain
are believed in organizations in which it begins the marketing approach. (Varadarajan, 2015)
The knowledge management systems raise support in marketing decision. Most common knowledge results seen by the corporate leaders are retailer knowledge, consumer knowledge
and market knowledge. The exchange of knowledge causes competitive advantage and adds
actual value to the clients. Rising number of companies have developed knowledge-based
software to deliver value perceptions such as marketing and sales alignment through effective
implementation. Knowledge-based system is said to be a library of historical connections. The
research essentials are collected in sections of target audience, data analytics and rival method
research.
Usually in organizations, process of identifying and developing critical knowledge is practiced in diverse areas
of the organization. Most importantly marketers and customer service teams need to engage to
obtain in-depth parts to identify the marketing solution for a product. For example. Throughout company's, marketing and corporate strategy are related into a value chain to produce and sell the
goods and services that our consumers want and they views consumers as a focal area in
companies, in order to gain long-term economic sustainability, all strategic practices comply
with corporate strategy. In order to gain value for money at a relatively competitive rate, particular organization's consumer-centred approach focuses on providing innovative and high-quality offerings to
improve client satisfaction.
Many organizations across the world, gives its consumers the highest retail experience through its
expanded approaches, for example offering rewards, having broad potential choices of services at affordable rates through introducing different methods. Furthermore, their other goal of building value products allows it modest to create fresh and stylish labels for its
service portfolio, thus attractive to potential customers who want a more sustainable way of
life.
REFERENCES:
Abishovna, B. A., 2014. The Principle of Effective Marketing Management. Procedia - Social
and Behavioral Sciences, Volume 109, pp. 1322-1325.
Avlonitis, G. J., 2016. Marketing Strategies and Tactics in a Period od Recession. Marketing
of Scientific and Research Organizations, 19(1), pp. 21-32.
Tracy, B., 1993. Maximum Achievement . In: Strategies and Skills that Will Unlock Your
Hidden Powers to Succeed. New York: Simon & Schuster Paperbacks, p. 352.
Varadarajan, R., 2015. Strategic marketing, marketing strategy and market strategy. Review,
pp. 78-90
Mcdonald Malcom, P. A., 1996. Marketing planning for services. Butterworth-Heinemann:
Oxford, Ox ; Boston.
McDonald, M., 1996. Strategic marketing planning: Theory, practice and research agendas.
Journal of Marketing Management, 12(1-3), pp. 4-27
Mattsson J, R. R. C. D., 2006. Let marketers reclaim corporate strategy. Journal of Strategic Marketing, pp. 165-173.
As a detail good
ReplyDeleteVery Informative and explained well.
ReplyDeleteThe concepts discussed such as, such as the distinction between corporate strategy and business unit strategy were described clearly making it easy to understand.
ReplyDeleteThe blog provides valuable insights into how marketing can drive success in a business. It serves as a reminder that marketing is not just a tool for attracting customers but can play a crucial role in achieving corporate objectives.
ReplyDeleteGood content and nice presenting.
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