3. MEANING OF CORPORATE STRATEGY
Corporate strategy covers the scope and purpose of business, its
objectives, its initiatives and resources necessary to achieve the objectives.
It provides strategic direction, allocation of resources and defines
constraints on what cannot be done.
The success of a company lies in reconciling the capabilities of its
corporation provide value to the customer.
4. According to Michael Porter, an effective corporate strategy should
have the following features
1. Unique competitive position for the company
2. Activities tailored to strategy
3. Clear trade-offs and choice vis-à-vis competitors
4. Competitive advantage arising from fit across activities
5. Sustainability coming from activity system, not the parts
6. Operational effectiveness
Walmart distribution system is the best example for this
5. Type of industry: one stop shopping center
Founder: Sam Walton
Year of establishment: 1962
First store: Rogers in Arkansas
WALMART
6. o The US-based Wal-Mart ranked first in the global Fortune 500 list in
the financial year 2001-02 earning revenues of 219.81 billion.
o Wal-Mart is the largest retailing company in the world.
o The company is much bigger than its competitors in the US - Sears
Roebuck, K-Mart, JC Penney and Nordstrom combined.
“CROSS-DOCKING “
o To make its distribution process more efficient, Wal-Mart also made
use of a logistics technique called “cross-docking.”
o In this system, the finished goods were directly picked up from the
manufacturing plant, sorted out and then directly supplied to the
customers.
WALMART
7. INVENTORY MANAGEMENT
Wal-Mart invested heavily in IT and communication systems to
effectively track sales and merchandise inventories in stores
across the country.
With the rapid expansion, it was essential to have a good
communication system.
Hence,Wal-Mart set up its own satellite communication
system in 1983.
WALMART
8. Corporate strategy deals with three key issues facing the corporation
as a whole:
1. Corporate’s overall orientation towards growth, stability or
retrenchment.
2. The industries or markets in which the firm competes through its
products and business units
3. The manner in which management coordinates activities, transfers
resources and cultivates capabilities among product lines and business
units.
9. MEANING OF HIGHTECHNOLOGY INVESTMNET
High technology is the most advanced currently available technology,
which is at its cutting edge.
The phrase ‘high technology’ was firstly used in new York times article
1957 in a story ‘atomic energy’ for Europe.
Robert Metz also used it in a financial column in April 1969.
High technology has become an international phenomenon, spanning
continents, epitomized by the world wide communication of the internet.
Multinational corporations are working on projects 24 hours a day in the
field of software development or in the development of an integrated
circuit.
10. High technology sectors are as follows:
1. Aerospace technology
2. Biotechnology
3. Information technology
4. Nanotechnology
5. Robotics
11. FEATURES OF HIGHTECHNOLOGY STRATGIC
INVESTMENT
1. Research in high technology strategic investment:
One of the main requirements of high technology strategic investment is
that the company investing its money in such technology should very
closely scan that whether high technology can be easily substituted for an
existing technology at a less cost and meet high quality standards.
2. Flexibility:
The successful corporation should be flexible enough in acquiring
information regarding new high technology investments. They should
always be ready to explore investment market with proper knowledge of
latest version of innovative technologies in the market.
12. 3. Proper allocation of funds:
A company using high technology investment should allocate its funds to
increase the efficiency of the organization as well as to reduce the cost. Small
companies which do not have sufficient resources are not in a position to exploit
new concepts in high technology.
4. Proper formation of strategy:
The success of high technology corporate depends on its competitive strategy
and ability to successfully enter in the market.
13. 5.Procurement of high technology:
Should a company buy or license technology from others or develop it
itself. The company should go for outsourcing of high technology when
the supplier’s technology is better and cheap and its development
requires special expertise.
6. Proper implementation of strategy:
To ensure the success of these strategies, the corporate system and
innovative investment culture should be available. The people are given
an opportunity to spend their time on innovative investment strategies so
that they become successful in their investment.
14. LIMITATIONS OF HIGHTECHNOLOGY STRATEGIC
INVESTMENT
1. Huge resources:
Huge resources are required to exploit the new concepts in technology. It is
not possible for small firms to invest in high technology as their resources are
always limited. Only large firms can spend money on new technology to
achieve effectiveness in their systems.
2. Rapid technological changes:
Rapidly occurring changes in technology are another limitation of high
technology investments. Today, it takes only 3 to 4 years to make a
technology obsolete where as earlier it used to take 10 to 15 years to replace
old technology by new technology.
15. 3. Lack of competence:
The companies which are investing their money in an innovative and high
technology should have technologically competent people to make proper
use of it. Some companies, before investing in latest technology, do not
properly assess the competence of their team to manage it.
4. Lack of innovative entrepreneurial culture:
Companies should have open and flexible culture for the transfer of
innovative technology in to company activities and products. Most of the
companies are still managed on traditional methods. They lack
independence, freedom, high reward s and different vision in their culture.
16. 5. Global competition:
Global competition must be assessed properly as many global
competitors like china and America are producing high tech products
to better suit the needs of customers in today’s scenario.