Corporate Level Strategy

The overall corporate level strategy is concerned with the broad scope of an organization’s strategic activities and the matching of these to the organization’s environment, its resources capabilities and the values and expectations of its various stakeholders. It looks at the whole strategic scope of the enterprise. This is the “large picture” view of the organization and includes deciding in which service or products markets to compete and in which geographic regions to operate. For multi-business firms, the resource allocation process—how equipment, funds, human resource and other resources are distributed—is typically established at the corporate level.

In addition, because market definition is within the scope of corporate-level strategists, the responsibility for diversification, or the addition of new products or services to the existing product/service line-up, also falls within the realm of corporate-level strategy. Likewise, whether to compete directly with other firms or to selectively establish cooperative relationships—strategic alliances—falls within the realm of corporate-level strategy, while needing ongoing input from business-level managers.

To further understand the broad meaning of corporate-level strategy, it is necessary to look at the three levels of strategy.

What are the three levels of Corporate-Level Strategy.

Corporate strategy

This strategy refers to the overall strategy for a diversified company. It is concerned with the mix of businesses the company should compete in, and the ways in which strategies of individual units should be coordinated and integrated.This is the highest strategy and is concerened with what businesses the firm is in or should be in and how integrated these businesses should be with one another. An example would be diversification into new product or geographic markets

Business strategy

It is concerned with market navigation and how each business attempts to achieve its mission within its chosen area of activity. Here strategy is about which products or services should be developed and offered to which markets and the extent to which the customer needs are met whilst achieving the objectives of the organization. It includes corporate planning at the tactical level and consists of the allocation of resources for complete operations. Example of business strategy is attempts to secure competitive advantage in existing product or geographic markets

Functional strategy

The role of this strategy is mainly to support the firm’s corporate strategy and business strategy. It is concern with how the different functions (marketing, production, finance, etc) support the corporate and business strategies. Examples of functional strategy are information systems, human resource practices, and production processes that facilitate achievement of corporate and business strategy.

The goals and objectives of a corporate level strategy is survival policy and overall long term direction. Its strategic components are scope of business portfolio, financial, technological and organizational competencies. Major decisions are concerend with financial policies and organizational policies.

All organizations should carry out some form of corporate level strategy to define where they are, where they want to go and how organizations can best get there. The need for strategic planning increases with the complexity of the organization & the uncertainty and turbulence of its environment.