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Three Corporate Strategy Examples

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 — August 20th, 2020

Three Corporate Strategy Examples

Every organization will naturally go through peaks and troughs, periods when business is good and times when the competition heats up or market trends and global events have a negative impact. Surviving the tough times and thriving in good times requires a solid corporate strategy. There are many corporate strategies examples but they can be condensed into three core approaches – growth, stability, and renewal.

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Corporate strategies examples

These three corporate strategies examples can be applied to specific periods in a business' existence:

  • Growth: To expand the business and increase profits
  • Stability: To maintain current business operations
  • Renewal: To revive an ailing business

1. Growth

Growth strategies include a number of approaches from cost leadership and product differentiation to horizontal or vertical integration. The approach a business takes should be governed by detailed corporate strategic planning.

Cost leadership: Ikea and McDonalds are global brands famed for their competitive pricing. This approach can be difficult to maintain due to changing market conditions and businesses need to constantly re-evaluate costs at every layer of the business. But the pay-off can be significant as is clear from these two massive brands.

Product differentiation: Both Lush and Apple have been successful in differentiating their products in competitive markets. Cosmetic retailer Lush is renowned for its ethical products and corporate social responsibility while Apple has captured market share with its sleek, user-friendly designs.

Horizontal integration: Acquiring businesses that complement your own is a good way to expand into new markets or capture increased market share. With its acquisition of Instagram in 2012 for $1 billion, Facebook cemented its place as the market-leading social media platform. Similarly, Disney's acquisition of Pixar and Marvel have helped it grow its audience dramatically.

Vertical integration: This approach allows a business to control layers of its business, from manufacturing to distribution. Global coffee brand Starbucks has acquired businesses at every step of its supply chain, allowing it to control the quality of its product and reap the benefits of each level.

2. Stability

With this corporate strategy, organizations are simply maintaining the status quo. They continue to follow the same path with no plans to diversify or grow the business. Rather, they are focused on building the organization at a steady pace. This is a useful strategy to employ following a period of expansion when a company can assess the business and determine a way forward or future strategy.

3. Renewal

When an organization is facing challenging circumstances part of the corporate strategic planning will involve retrenchment or turnaround. These approaches could include selling part of the business or spinning it off, and in cases where the very future of the company is at risk, creating a leaner business through lay-offs and other dramatic cost-cutting exercises.

The goal of this strategy is to get the organization back in shape and ready to proceed to either a stability or growth phase.

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Where to start with corporate strategic planning?

A key part of the corporate strategic planning phase is to identify the corporate strategy components. These are the starting points for any corporate strategy and arguably the foundation of the organization itself.

  • Vision and mission: what is your organization aiming to achieve and how do you want to project yourself?
  • Strategic objectives: what are your end goals?
  • Allocation of resources: how will you allocate your resources (human and financial) to achieve these goals
  • Prioritization: what are your priorities when planning your corporate strategy

Don't underestimate the importance of corporate strategy

A corporate strategy is essentially the playbook of a company. It not only defines the strategic goals, it outlines the way in which an organization achieves those goals. Without this roadmap, organizations can stumble around in the dark.

Each corporate strategy will contain key corporate strategic components that can be referred back to at each juncture: what is our vision, what are our objectives, what do we need to invest in to make this happen, what areas need to be prioritized above others. A well thought out plan will guide an organization through significant periods – good and bad – and give it the tools to measure its success.

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