Corporate Strategy



Corporate Strategy

Introduction

Often we hear phrases like "my company's corporate strategy is the best sign people "or" controlling the main channels of distribution.” In some cases we have heard that "Corporate strategy is to differentiate my business is by finding a niche." In the first two phrases spoken human resource strategies and marketing, while the third is refers to competitive strategy. However, none of the three sentences actually refers to the corporate strategy.

The two main concerns of corporate strategy are: where to compete? How to add value the corporation as a whole from the corporate centre? The first question opens corporate growth options, such as internationalization or globalization, business diversification or vertical integration to along the value chain. It also opens the possibility to choose different ways to grow, through acquisitions or mergers, strategic alliances or through internal development, also known as organic growth. The second question is the need to ensure that the corporate centre add value the whole business of the corporation. This added value generated by corporate advantage is i.e. the additional advantage due to form a group of competing companies in place of each business independently in their respective industries. In this context, this article attempts to answer three fundamental questions corporate strategy on growth: where to grow? How to grow? How to contribute value from the corporate center in the growth process? This reviews the benefits and disadvantages of various options of corporate strategy in the light of experience different corporations.

Discussion

The company has several possibilities to redefine the scope of competence. For example, a company can change its degree of vertical integration, that is, businesses that belong to the same value chain of the original business. They often suggest different reasons for vertical integration. The most common is the idea of internalizing activities key to the business or those that contribute significantly to the quality of the product the end. However, the implicit assumption in both cases is that the company has the basic skills and resources, and that is what he does best. In fact, if you get up this assumption and are companies which have the same activity achieving higher quality and / or a lower price, then it makes more sense to let others do it, provided they are not able and willing to increase prices or limit supply over arbitrarily for any reason whatsoever (Amihud and Lev, 1999).

Therefore, vertical integration really depends on the operations of the markets. For example, the cement industry in much of the costs and benefits, and both value added are in the cement manufacturing process, which is an industrial process. At one end of the value chain, the process of exploitation and supply raw materials is a mining business. Therefore, a cement company should concentrate on their core business and buy industrial raw materials of different providers in the market. If the market from working properly and there were several suppliers competing with each other probably would occur.

However, the reality is in many ...