Corporate Strategy Formulation

2047 WordsMar 12, 20119 Pages
CORPORATE STRATEGY FORMULATION Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. Strategy formulation is a part of a strategic management process that comprises of environmental analysis, formulation, implementation and evaluation and control. Strategic management is an ongoing process to develop and revise future-oriented strategies that allow an organization to achieve its objectives, considering its capabilities, constraints, and the environment in which it operates. Setting Organizations’ objectives The key component of any strategy statement is to set the long-term objectives of…show more content…
Corporate level strategy involves; • Grand strategy - what should be an organization’s growth objective, ranging from retrenchment through stability to varying degrees of growth - and how the organization accomplishes this. • Portfolio strategy - what should be our portfolio of lines of business, which implicitly requires reconsidering how much concentration or diversification we should have. GRAND STRATEGY Grand strategy is an overall framework for action developed at the corporate level. It is most commonly used when a corporation competes in a single market or in a few highly related markets. There are three basic grand strategies that corporations choose to pursue: growth, stability, and retrenchment. Growth Strategies A growth strategy calls for overall corporate growth. Growth .strategies can be classified into one of two fundamental categories i. Concentration When a company 's current industries are attractive, have good growth potential, and do not face serious threats, concentrating resources in the existing industries makes good sense. There are two basic concentration strategies, vertical integration and horizontal growth. Vertical Integration: This relates to the degree to which a firm operates vertically in multiple locations on an industry’s value chain from extracting raw materials to manufacturing to retailing. This type of strategy can be a good one if the company has a strong competitive
Open Document