Corporate level strategies lay down the framework in which business strategies operate

For instance, it is at the corporate level that an organization decides whether to expand,
stabilize or retrench. These strategies are then applied at the business level. Individual
businesses need their own strategies in order to contribute to the achievement of the overall
corporate objectives.

The function of corporate level strategy is to deal with a portfolio of businesses in such a
manner that the overall returns are optimized.
Shifting of resources from cash rich business to another business which has a good growth
potential but has yet to create a surplus. Therefore, corporate level strategies can guide
businesses towards growth.

Business strategies are aimed at building competitive advantage in the individual businesses
that a company has in its portfolio. Business strategies are supported by functional and
operational implementation in each business.

Drivers of Cost Advantage

1. Input/raw material costs
Sourcing cheaper raw material
Sourcing cheaper Labour
Location Advantages- close to raw materials

2. Economies of Scale of Scope

Scale- The more you produce of one product, the more fixed costs can be spread
Scope- Using inputs to produce a variety of products, spreading fixed costs
3. Economies of learning/experience
The longer an organization does an activity, the more efficient it should get at doing it
Labour productivity improves- staff learns to do things better over time.
Process innovation over time
Differentiation Drivers
Complexity - unique technological approach to the product based on superior R&D
Being first with a new product
Challenging existing standards or setting new ones others can’t reach

Market Factors
Demographics - society is changing & subgroups are developing
Psychographics - personality, values, attitudes, interest & lifestyles becoming more diverse
Organisations can project a persona - customers can relate to it
An organisation can protect a persona - customers can relate to it

Supply side – uniqueness

Product attributes - offering more/particular features to increase value
Innovation - feel of being the latest
Product integrity - quality & reliability - perhaps backed by after sales service
Reputation - goes beyond brand to a positive perception e.g. use of indirect marketing
technique

Demand Side
Product attributes - features/benefits identified by customers
Positioning - where customers perceive the organisation is relative to its customers
Sociological/psychological factors - customer may buy product to enhance own
image/reputation