Corporate Strategy

Hai..

Ok, now we move to the next topic which is corporate strategy.. actually, I still not understand well about this topic.hehe.. it’s okay.. I will explain a little about it and we can learn it together.. okey =)

Base on Business Dictionary, corporate strategy is the overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals.

Corporate Strategy concerned with the broad and long-term questions of ‘what business(es) the organization is in or wants to be in & what it wants to do with those businesses’.

Task involves

*      Moves to enter new businesses

*      Actions to boost combined performance of businesses

*      Ways to capture synergy among related businesses

*      Establishing investment priorities & steering corporate resources into most attractive units

Product-Market Diversification Option

*      Where firm seeks to expand both into new products & new markets

*      Single-business firm becomes a multiple-business firm since it is now operating in a different industry

Diversification Strategies is a corporate growth strategy in which a firm expands its operation by moving into a different industry. Many reasons or motives for the company decide to diversification.. And the two major of  diversification is related (concentric) diversification and unrelated (conglomerate) diversification.

Related (Concentric) Diversification

It is diversifying into a different industry but one that’s related in some ways to the organization’s current operations.

Strategic “synergy”, which is the performance of the sum of the parts is better than the whole

*      The idea that 

Synergy happens because of the interactions and the interrelatedness of the combined operations and the sharing of resources, capabilities, & distinctive competencies

Unrelated (conglomerate) diversification

It is diversifying into completely different industry from the firm’s current operations where firm move into industries where there is no strategic fit to be exploited, no meaningful value chain relationships and no unifying strategic theme. For example is GE, Walt Disney, Sara Lee and etc. Their approach is venture into any business with good profitability prospects.