In any commercial or industrial setup, a sound corporate strategy is vital in achieving business goals and long-term success. Several factors go into developing an effective corporate strategy. These are termed the four pillars of corporate strategy.
Four Pillars of Corporate Strategy
The following brief throws light on the following four pillars of corporate strategy:
- Visioning
- Setting of Objectives
- Resource Allocation
- Prioritization
The foundation of an effective corporate strategy lies in truthfully evaluating oneself. It can be done by answering the following vital questions about your business:
- What is the present state of your business?
- Where do you aim to take your business in the next four to five years?
- How do you get your business there?
- What resources, manpower, and finance will help you get there?
In this context, Corporate Strategist has an important role to play as they are the one to lay out a corporate strategy to build and strengthen the business and take it where it wants to be.
Four Pillars of Corporate Strategy- In Brief
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Visioning
Setting a vision and mission for the business and corporate values that will be the basis for achieving the vision is an important aspect of corporate leadership. Business leaders need to plan around 4 to 5 years into the future. All the top personnel should be included in this process to garner maximum commitment and foster deeper teamwork. When businesses state their vision, the primary focus is on how the leadership views the company’s evolvement in the years to come.
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Setting Objectives
Once the Corporate Strategist has developed the company’s vision, the next step is to lay down the top goals of the company spanning around 4 to 5 years. It is an objective setting. Strategic objectives are the broad company goals that explain how the company will set about fulfilling its mission. If the business has its strategic objectives well in place and they are effectively communicated to its personnel, there is nothing to stop them from achieving its goals in the times to come.
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Resource Allocation
Resource allocation comprises decisions for the best allocation of capital and manpower resources against specified goals and objectives. It involves planning, managing, and allocating resources to the varied business units in such a way as to maximise the value of the entire business.
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Strategic Trade-offs or Prioritisation
It is the most difficult aspect of corporate strategy. Two factors have to be considered by business leaders while attaining the optimal mix; they are:
- Every business decision carries a certain degree of risk
- It can sometimes be difficult to take advantage of every viable opportunity
The Corporate Strategist will have to balance between risk and reward and follow the desired risk management and return generation levels.
