Organizational Strategies

Cite this article as:"Organizational Strategies," in The Business Professor, updated April 9, 2020, last accessed October 25, 2020, https://thebusinessprofessor.com/lesson/organizational-strategies/.

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What is an Organizational (Corporate) Strategy?

A corporate-level strategy focuses on high-level decisions that affect the market in which the company competes. It may also regard what the company stands for and how it will be perceived by stakeholders and third parties.

  • Growth-Based Strategies can generally be grouped into:
    • Concentration – Focusing on a single line of business.
    • Diversification – Diversification is when companies participate in numerous lines of business or numerous unrelated products/services at the same time. Highly-diversified companies will have numerous business lines. A less-diversified company will have fewer or only one business line.
    • Integration – Combining with suppliers, buyers, or competitors for competitive advantage.
    • Cooperation – Working with competitors rather than competing.
    • Internationalization – Going outside of the countries borders in search of new markets.

Stability Strategies can be based upon:

  • No Change – Stay the operational course.
  • Profit-earning – Maximize profits at a given market share.
  • Cautionary strategies – Planning for the future and mitigating risks.

Retrenchment Strategies can be grouped into:

  • Turnaround – Reorganizing a company that is declining.
  • Divestment – Ridding the company of less valuable operational units.
  • Liquidation Strategies – Selling off assets not necessary for operations.

Mixed Strategies – Lastly, the organization may employ a strategy that employee any of these methods.

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