Corporate strategy involves determining what business(es) a company is or wants to be in and how to maximize performance across businesses. It establishes the overall direction for a company. A company's corporate strategy is constrained by where it sits on a continuum from very general to highly specialized resources. Most companies mistakenly enter businesses based on similarity in products rather than underlying resources. An effective corporate strategy ensures a tight fit among the company's resources, objectives, and competitive strategies. While any one strategy may work well for some companies, every company's context is different, so the strategy must suit its unique resources. The test of a good corporate strategy is whether the business is worth more to the current owners than potential new owners.

1. Presented by: Anju Rana

2. Presented by: Anju Rana
What is Corporate Strategy?
•Those strategies concerned with the broad and long-term
questions of
•what business(es) the organization is in or wants to be in &
what it wants to do with those businesses
•Task involves
•Moves to enter new businesses
•Actions to boost combined performance of businesses
•Ways to capture synergy among related businesses
•Establishing investment priorities & steering corporate
resources into most attractive units

3. Presented by: Anju Rana
– Operates primarily in only one industry (e.g., Coca-Cola
– Beverage Industry; Wrigley Jr. Company – Chewing
Gum)
– Operates in more than one industry
– Example: PepsiCo – Snack Food Industry business (Frito
Lay); & Beverage Industry
– Philip Morris Companies – Tobacco Industry; Brewery
Industry (Miller Brewery); & Food Processing Industry
(Kraft General Foods).

4. Presented by: Anju Rana
• Corporate strategy establishes the overall
direction that the organization hopes to go.
• Competitive & functional strategies provide
the means or mechanisms for making sure
the organization gets there.

5. Presented by: Anju Rana
By David J.Collis &
Cynthia A.Montgomery

6. Presented by: Anju Rana
•True corporate advantage
requires a tight fit at each
angle.
•An outstanding corporate
strategy is a carefully
constructed system of
independent parts.
•In a great corporate strategy
these elements are aligned
with one another.

7. Presented by: Anju Rana
A corporations location on the continuum constrains the set
of businesses it should compete in and limits its choices about
the design of its organization along the other dimensions.
Most of executives think they’re getting the alignment of
their corporate strategies right when infact they are not.
They mistakenly enter businesses based on similarities in
products rather than similarities in the resources that
contribute to competitive advantage. (eg. Mercury measures)

8. Presented by: Anju Rana

9. Presented by: Anju Rana
•$12 billion
conglomerate.
•Built around a set of very
general resources that is
leverages into a wide
range of businesses.
• It illustrates that a
carefully conceived and
implemented strategy at
the far left of the
continuum can create
substantial amount of
value.
•$ 14 million, a limited
product line of drapery
hardware.
•Resources are neither
exceedingly general nor
specific but an attractive
mixture of both.
•$ 14 billion consumer
electronics giant.
•Sits near the specialized
end of the resource
continuum.
•Its consistent pursuit of
vision of technological
creativity has pushed it to
the forefront of its
industry.

10. Presented by: Anju Rana

11. Presented by: Anju Rana
•Tyco’s resources are
general, much like those
of venture capitalists &
private equity groups.
• Tyco confines itself to
businesses in which
division executives can
held strictly accountable
for a limited number of
financial measures.
•Tyco competes in
mature, stable, low-tech
businesses which
compared with sharp’s
face less uncertainty .
• the relatedness across its
businesses comes not
from similarities in the
products themselves but
from the common
resources they draw on:
• relationship with
retailers.
• Its efficient high
volume manufacturing
• Superior service
• On-time delivery
• Newell will never
compete in high-tech,
seasonal or fashion
products because they
require skills the
companies doesn’t have.
• Sharp’s set of
businesses is fairly
restricted: television
& video systems,
communication &
audio system
appliances,
information system.
• unlike its
competitors Sharp
never considered
entering the movie
business because it
knows it has no
competitive
advantage outside its
technology base.

12. Presented by: Anju Rana

13. Presented by: Anju Rana
As brilliant as any one strategy might be, it won’t necessarily work
well for all companies.
because:
Every company starts at a different point
Operates in different context
Has fundamentally different kind of resources

14. Presented by: Anju Rana
•The acid test for any corporate Strategy is this:
the company’s business must not be worth more to
other owner.
•It requires the continual upgrading not only of the
resources on which the strategy is based but also of
all the elements of the triangle and their fit.

15. Presented by: Anju Rana
Presented by:
ANJU RANA
SMS-046