Corporate Level Strategy
Meaning:
The strategy that top management formulates for the overall company is known as corporate level strategy. When a company is diversified, a general plan is required to involve the SBU’s that the company should have and how to manage a large number of SBU’s, that strategy or plan is known as Corporate Level Strategies.
It is concerned with the competitive and tactic issues related to business and functional strategies. At the corporate level, the top management is charged with defining the corporate profile by identifying the specific h or industry in which the firm is and or should be operated. So, the corporate profile is a function of the firm’s particular strengths and weaknesses and the opportunities and threats posed by the external
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Of course, when the surplus resources are in the form of cash, the corporation will be very easy to pay attention to it. So the most primitive and simple corporate-level strategy should be the corporation to select and invest in new business unit. Clearly, from the perspective of strategy resources theory, the corporation has a variety of resources, not only financial resources, but also human resources, information resources, brand resources, management resources, etc. Driven by the target of using surplus resources efficiently, the evolution of corporate-level strategy presents the three main research ideas: portfolio planning, synergistic effect, parenting advantage.
- Portfolio planning: Bower holds that corporation’s investment for different businesses should not only consider the financial comparison, but also consider the business’s market competition and development. Portfolio planning that is developed in the 1970s has provided a useful analytical tool for many corporations. They can analysis business opportunities and competitiveness, chose business portfolio, and decide the funding allocation, thereby improving overall performance. Representative analysis tools are Boston matrix and industry attractiveness-business position matrix.
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They consider that the significance of corporate-level strategy is to achieve “parenting advantage”, it means, management need test continuously if their skills and resources are consistent with the requirements of the business unit’s success. Parenting Advantage Theory explains the significance of corporation being and its operating logic, presents to respect the management’s “dominant logic” and the feature of each business unit. So, management should seek the “parenting opportunity” between itself and business units as the basis for developing corporate-level
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