Corporate-Level Strategy Examples (Importance and Benefits)

By Indeed Editorial Team

Published June 17, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organizations and businesses use corporate-level strategies to define objectives and outline steps for achieving them. These strategies can help team members and employees align their contributions with the collective organizational goal. Understanding the nature and examples of cooperate-level strategies can help you determine the best strategy when managing an organization. In this article, we explore the relevance of these corporate strategy examples, consider what corporate-level strategy is, discuss its importance, outline the features of this strategy, and highlight three corporate-level strategy examples.

Relevance of corporate-level strategy examples

Corporate-level strategy examples are relevant to managers and executives because it inspires them when devising their own corporate-level strategies. With these examples, they can determine the different strategy type and approaches, identify what to consider when creating this strategy, and understand the nature of the strategy based on their existing circumstances. Generally, by using these examples, managers and executives can understand how to create their own corporate-level strategy to achieve organizational goals.

What is corporate-level strategy?

Corporate-level strategies are the various approaches companies or organizations apply when defining, outlining, and projecting plans for achieving goals. These strategies determine the optimal resource allocation to apply for goals of varying complexity, scope, and time frame. For instance, you can develop a corporate-level strategy to improve profits within a fiscal period. Your objectives can also extend to long-term objectives, like reaching customers in a new niche. Developing your corporate-level strategy interacts with other components of business strategy to achieve the best result.

Importance of corporate-level strategy

Here are some benefits teams can enjoy by adopting corporate-level strategies:

Encourages innovation

The success of a business depends on how well it can remain competitive in its industry. To secure this advantage, businesses adopt strong corporate-level strategies to define goals and outline steps for achieving them. Such plans encourage innovation as businesses think proactively to identify trends and make projections.

Read more: How to Be Innovative and Creative at Work (12 Easy Steps)

Increases productivity

With a clear strategy in mind, you can help your team increase their productivity. A cooperate level strategy helps team members identify the collective goals and how their actions contribute to realizing them. This gives them a direction and can help them contribute their skills and expertise to vital business aspects. With a collective goal in mind, team and department members are also more likely to collaborate on various projects with increased efficiency. Similarly, with the foundation corporate-level strategies provide for efficiency and optimization, a business has a better chance of improving profitability.

Optimizes business models

The goal of a business model is to help a business adapt and compete effectively within an industry. Aligning a business model with organizational objectives can lead to higher profit margins and effectiveness. You can use a definite corporate-level strategy to align a business model with company objectives through valuable industry insights and acquire larger market shares. Some industry insights that these strategies provide include consumer segments, service offerings, market trends, best practices, and product offerings.

Related: What is Corporate Development? (Types and Strategies)

Ensures viability and resilience

Change is constant across industries, and these changes make it essential for businesses and teams to retain their competitive advantage through adaptability. The long-term perspective of corporate-level strategies is vital in preparing you for new developments. With a clear goal in mind, you can adapt to new circumstances without compromising your original objective. This adaptability contributes to your team's resilience and improves a business's viability.

Features of corporate-level strategies

Here are some of the common features you can identify across corporate-level strategies:

Diversification

Diversification is a valuable strategy for responding to and preparing for changes within a target market. You can apply this feature to your strategies by defining niche needs and new market entry points. This feature also allows you to create new business opportunities and leverage new customer needs. Applying this feature in your strategy uses varying levels of resources. For instance, you can diversify by interacting with clients in a new niche or rebranding your products to appeal to a new market segment.

Related: What Is a Conglomerate? With Types, Examples, and Advantages

Horizontal integration

Horizontal integration occurs when a business conducts a merger with another business operating at a similar level within the same industry. Applying this strategy can improve market share and combine the strengths of different companies. Mergers makes it essential to determine compatibility and transition procedures when applying this feature in a corporate-level strategy.

Forward or backward integration

This feature of corporate-level strategies places you in different supply chain stages. With a forward integration, you assume the position of a distributor. While this allows you to replace their functions, it also comes with various cost implications. These cost implications help you fully leverage your forward integrations and include building warehouses or developing direct relationships with end-users. In contrast, a backward integration allows you to assume the position of a supplier. This replaces their functions and makes you responsible for expanding product lines. You can leverage this integration by developing new products or improving existing ones.

Profit

The long-term nature of corporate-level strategies prioritizes stability in its interactions with profitability. This allows you to incorporate cost-efficient solutions while trying to improve the profitability of your strategies. You can apply the profit feature by selling the company's assets and reducing non-core processes.

Research

Research is an important feature of corporate-level strategies as it balances expansion and retrenchment strategies. For instance, you can research the needs of a new market segment when determining if expansion is the best strategy. This information allows you to determine feasibility before committing to a strategy. You can also adopt the research feature to monitor the performance of your strategies.

Related: How to Do Market Research with 6 Guided Steps (With Types)

Concentration

This is a feature of most expansion strategies that involves allocating a majority of your resources to growing market share. You can apply this feature by improving existing products or familiarizing yourself with current market trends and customer tastes. This feature also offers ample opportunities to increase profitability by improving your product's reach and demand.

3 corporate-level strategy examples

Here are three corporate-level strategy examples you can consider for organizations or teams:

1. Expansion strategy

Expansion strategies focus on growth and increasing an organization's reach across market segments. An expansion strategy uses features like concentration, integration, diversification, and internationalization. With concentration, you intensify the use of your resources in developing products and services. This approach can help you improve the quality of existing products with better human resources and new market data. You can apply concentration within your teams by focusing on product development, market development, and market penetration. Focusing on these aspects improves your expansion strategies by observing new niches and identifying new product uses.

Integration involves examining your value chain and combining all your relevant activities to widen your scope. Diversification is also a popular expansion strategy for identifying new market opportunities and product demands. It combines various approaches to establish an organization's competitive advantage in new markets. For instance, you can combine horizontal, vertical, active, and passive approaches when diversifying. Internationalization is a special form of diversification that takes products and services beyond a domestic market. This strategy can help you leverage more accommodating market policies, available raw materials, and higher demands.

2. Stability strategy

Stability corporate-level strategies are applicable where you're functioning well under the current business model. This model prioritizes incremental growth and can help you improve a company's reach and market share. For instance, you can apply stability strategies to improve products, offer better services to customers, and conduct specialized research and development programs. Stability strategies combine the proceed with caution, profit, and no change strategies. Using the proceed with caution strategy involves taking regular timeouts between your expansion or retrenchment strategies. These timeouts allow you to incorporate changes slowly and determine their feasibility.

Timeouts are also helpful in making effective and sustainable changes by allowing different organization levels to familiarize themselves with strategy demands. The profit strategy increases profits by reducing costs, increasing the prices of products and services, selling assets, and eliminating non-core business elements. The no-change strategy helps ensure stability by maintaining core operations in their existing form. This approach is functional where there are little or no changes in team structure of customer needs. You can consider your team stable when your niche remains profitable, customers have stable needs, and there are no aggressive competitors.

3. Retrenchment strategy

Retrenchment strategies are applicable where you're considering changes to limit the scope of your organization. You can commence this strategy by identifying the areas you can optimize to reduce costs and alter processes limiting productivity. The aspects of an organization that these strategies focus on can be internal or external. They can include poor management, inefficient strategies, the introduction of attractive product substitutes, market trends, and restrictive policies. After identifying areas to optimize, you can use appropriate retrenchment strategies to counter reducing cash flow, market share, and profitability.

You can also develop systems to monitor your performance to determine when these strategies are helpful. Monitoring your performance helps you identify indicators of decline and implement strategies for recovery. These recovery approaches can include a turnaround, divestment, or liquidation strategy. Liquidation is usually the last resort when turnaround and divestment features are less effective. Divesting and turnaround features focus on new competitive advantages, product positioning, reducing expenses, and selling assets. In contrast, you can close a product line to save the resources you expend on its manufacture with liquidation strategies.

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