For most business owners, being successful does not just “happen”. Success is almost always put down to a series of decisions made at just the right times. Planning, preparation and proper execution is the best recipe for success.
The method? A corporate strategy.
What is a Corporate Strategy?
The corporate strategy is the highest strategic plan that exists in your business, and simply put, it is a long term plan to that clearly outlines the goals for the organisation, and when they are to be achieved. It is with these goals in mind that all decisions and activities for your business are decided and acted on. Having a clear corporate strategy that you share with all employees is also a great way to motivate staff, as they feel more included and invested in the direction of your business.
There are four common types of Corporate Strategy that are important to know.
- A strategy that focuses on the business entering new markets or introducing a new product or service. Organisations using a growth strategy are looking to dominate the market and withstand competition.
- Aims to expand market share, increase profits, and grow the business quickly.
- A highly rewarding strategy that adds significant value to the company.
- A strategy aimed at maintaining the current market share of the business, and continue to serve the same industries and customer types.
- A common type of strategy as it involves less risk, and is inexpensive, but still improves performance in the long run.
- Focuses on sustainable growth
- The opposite of the Growth Strategy. A retrenchment strategy would be implemented to reduce the losses incurred by restructuring, cutting off loss-making divisions, etc.
- The main types of retrenchment strategy are divestment, liquidation, and turnaround.
- Is often used when an organisation is looking to revamp their business model, or need to sell assets to generate cashflow. They may also choose to pause a service or product due to low demand or high costs.
- Retrenchment is the least used strategy, usually only used for an organisation in “survival mode”.
- A combination strategy is exactly what it sounds like, using a combination of other corporate strategies, instead of focusing on one.
- Use of the combination strategy is common in large organisation with multiple divisions or business units who perform different functions.
It is a great idea to employ the services of a corporate strategist to create your corporate strategy. Corporate strategists have experience with a wide range of businesses in various industries, and will dig down to truly get to know the ins and outs of your business before working on a plan.