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Corporate Strategy

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Corporate level strategy is the highest level of strategic decision making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance. It is value-oriented, conceptual and less concrete than decisions at the business or functional level. Thus, it is a company’s vision and tactics to outperform its competition.

  1. Cost Leadership
    Businesses can find it difficult to set the price of a product to produce an above-average return while remaining competitive so cost leadership is required by combining efforts of suppliers, designers, research and development, production and distribution.
  2. Differentiation
    By entering specialized markets, a business can often price a product/service higher by meeting specialized needs of the market. This small segment usually requires high-quality products, innovation, technological features and superior customer service.
  • Lack of monitoring business
  • Lack of identifying needs of customers and the competition prevalent in the industry

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  1. Value Creating Strategy
    In this the business seeks to edge out its competitors by gaining more market share. These strategies seek to add real and perceived value to the business’ products and services by exploiting the resources and capabilities of the business that is shared by the entire organization to reduce costs and increase efficiency.
  2. Value Neutral Strategy
    The organization isn’t so much concerned with allocating resources and manpower as it is with securing its current place within the market. It helps the business operations plan by using various approaches such as – initiating regulatory oversight, creating synergy between departments, working to reduce risk and securing a steady cash flow.
  3. Value Reducing Strategy
    It happens at an organization-wide level when the stakeholders or customers perceive that the business is getting too big or that only the top-level executives are benefiting from diversification. In this case, value-reducing strategy refocuses the business’ market, helps it define a target demographic and puts mechanisms in place to prevent unnecessary or harmful growth.