Corporate Strategies Examples (With Types and Benefits)

By Indeed Editorial Team

Updated June 10, 2022 | Published January 3, 2022

Updated June 10, 2022

Published January 3, 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.

Many companies can benefit from having a corporate-level strategy. They help companies stay organized and achieve business goals. Understanding corporate strategies and how to implement them can help you make the company you work for more successful. In this article, we explain what a corporate-level strategy is and the characteristics they have, discuss corporate strategies examples, and tell you why having one is beneficial.

What is a corporate-level strategy?

A corporate-level strategy is a multi-tiered company plan that leaders use to define, outline, and achieve specific business goals. A small business can use a corporate-level strategy to increase its profits over the next fiscal year, whereas a large corporation might be overseeing the operations of multiple businesses to achieve more complex goals, such as selling the company or entering a new market. Every company's strategies are different, but they typically follow the same template or share similar characteristics.

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

Types of corporate strategies examples

Consider the following types of corporate strategies examples to determine which one may be the best option at the company you work for:

Stability strategy

The stability strategy is for companies that want to maintain their operations as they're successful. This strategy assumes that the company is doing well under their current business model. If the pathway to growth is uncertain, you may want to employ a stability strategy to ensure incremental progress that still brings in revenue. This includes practices such as research and development and product innovation. An example can be offering free trials of your existing products to your target audience to increase its engagement.

Expansion strategy

The expansion strategy is great if a company is planning to create new products and reach new audiences. You can also use this strategy if you're upgrading the level of activity within the business, such as taking on new clients or hiring more employees. You can apply this strategy if the region you're operating in has a strong economy or if your focus is to enhance your performance. Overall, this strategy has large earnings potential for executives, which can lead to raises and expansion to employee benefits packages as well.

Retrenchment strategy

The retrenchment strategy requires you to consider switching your business model. This may involve stopping the manufacturing of a product or reducing its functionality. It can be best to allocate more energy to accounts receivable to ensure you're still getting payments of services you provided to maintain the organization's cash flow. Companies only use this strategy as a protective measure to keep the solvency of the business. You can compile a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats, to see which market of which you can successfully operate.

Combination strategy

A combination strategy is a hybrid of the previous three strategies to create a business model. Its main purpose is to increase the company's performance and find out which areas of the company can grow and retract based on market conditions. This approach makes it easier for you to make adjustments to the company's strategy because you can be more flexible with your time and allocation of funds for each function of your strategy.

Why is having a corporate strategy important?

Having a corporate-level strategy is beneficial for the following reasons:

  • Informed planning: Creating a corporate strategy allows you to plan for the future. You can determine what goals you want the team to meet and ensure they align with the company's overall goals.

  • Identify strengths and weaknesses: When creating a corporate strategy, you assess the strengths and weaknesses of the company. This allows you to create a strategy that helps you eliminate weaknesses and optimize strengths.

  • Increase efficiency: Corporate strategies help you increase efficiency, as you can plan ahead for deadlines and allocate tasks appropriately. You can also allocate resources, such as time and money, more efficiently.

  • More control: Planning with a corporate strategy gives you more control over day-to-day activities. You can limit your plan strictly to activities that can help you and the team reach your goals.

  • Competitive advantage: Researching the market and the company's competitors when creating a corporate strategy can be helpful. It allows you to create strategies and processes that are unique, helping the company stand out against its competitors.

Related: What Is Strategic Planning? (With Benefits)

Characteristics of corporate-level strategies

While every company's strategy is different, they typically hold similar characteristics, such as the following:

Diversification

Diversification is when you notice that can change the market. Moving into new markets allows you to create new business opportunities with clients. It can give you the chance to build a long-lasting relationship linked to the execution and satisfaction of the products and services you render. If you have enough capital, you can try rebranding on shifting your services to a new target audience eager to try a new product.

Forward or backward integration

Forward integration is when you take the position of a company that served a previous role in your supply chain. The business becoming a distributor changes the scope of operations and you may move resources to help move and store products for companies in your area. Backward integration means that you start in the supply chain business and you move to be a supplier of goods and services. You may have to produce more products to adapt to the change in the business.

Vertical integration

Vertical integration is a growth strategy where one company acquires another one in their supply chain. For example, a grocery store purchasing the dairy farm that provides their milk and cheese. This can strengthen the original company's supply chain, increase profits, and reduce production costs.

Horizontal integration

Horizontal integration is another growth strategy where two businesses at the same level combine. This helps both companies grow and increase their market power. Horizontal integration typically means both companies hold equal power, they can just reach a larger customer base now. An example of horizontal integration is a streaming service partnering with a television network to offer their shows to paid subscribers.

Profit

This strategy focuses on having more capital to spend once you take out your expenses. It may be beneficial to reduce costs or expenses, sell investments like stocks and bonds, increase the price of services you sell to the customer base or cut back on non-essential services. This strategy may not help you increase revenue, but it does help maintain profit, so it's a good option for new companies or those with low sales.

Turnaround

The turnaround strategy involves improving the existing products to sell more of them. Companies typically consider past customers' reviews and feedback to determine how to improve their product and increase its efficiency. Others may test their product and processes to improve their quality assurance standards and create high-quality products, generating more profit.

Divestment

This is a retrenchment strategy that works on solving problems and enhancing business results. It involves a company selling its assets, investments, or divisions to pay off debts or raise money. Getting out of debt and earning a profit allows companies to report more favourable financial information to stakeholders.

Liquidation

If a company isn't doing well, it may have to liquidate. Liquidation is selling the entire company to another entity, so it's typically the last option for business owners. As it's the final option business owners have, they may have to sell the business for less than it's worth. They typically sell the company to a new owner and use the money they earn to pay their debt to any creditors or shareholders.

Related: What Is Equity in a Company? (With Definition and Types)

Concentration

This is an expansion strategy that adds more market shares to the industry. There are three sub-strategies of concentration: market penetration, market development, and product development. Market penetration involves gaining additional customers with existing products but new advertising techniques in the same market. Market development involves selling existing products in a different market, such as an international one. Product development involves creating new products to sell in your current market.

Investigation

This is a research and testing strategy that allows you to test different methods. You and the team can research and brainstorm different strategies that may work for the company and test each one over a period of time. Whichever one improves the company's performance the most is the best option.

No change

The no-change strategy is a stability strategy for businesses that are already successful. It aims to maintain the business and allows it to continue as it is. This is an active strategy, meaning businesses consciously choose not to change anything. They may reevaluate this strategy every quarter or year to ensure it's still working.

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