What is a corporate-level strategy?

A corporate-level strategy is a multi-tiered company plan that leaders use to define, outline and
achieve specific business goals. A corporate-level strategy can be used by a small business to
increase its profits over the next fiscal year, whereas a large corporation might be overseeing the
operations of multiple businesses to achieve more complex goals like selling the company or
entering a new market.

Types of corporate-level strategy

Stability strategy

The stability strategy is when you proceed in working with clients in your industry. This strategy
also assumes that your company is doing well under this current business model. Since the
pathway to growth is uncertain, you should employ a stability strategy to ensure incremental
progress that still brings in revenue, which includes practices such as research and development
and product innovation. An example can be offering free trials of your existing products to your
target audience to increase its engagement.

Expansion strategy

The expansion strategy is great for you if your company is planning on creating new products
and reaching new audiences. It can also be used if you're upgrading the level of activity within
your business like taking on new clients and hiring more employees. You can apply this strategy
if the region you're operating in has a strong economy or if your focus is to enhance your
performance. Overall, this strategy has large earnings potential for executives, which can lead to
raises and expansion to employee benefits packages as well.

Retrenchment strategy

A retrenchment strategy requires you to strongly consider switching your business model. This
may involve stopping the manufacturing of a product or reducing its functionality. You may
need to allocate more energy to accounts receivable to ensure you're still getting payments of
services you provided to maintain your organization's cash flow.

This strategy is only used when the company is looking to take protective measures in keeping
the solvency of the business. You should compile a SWOT (Strengths, Weaknesses,
Opportunities and Threats) analysis to see which marketing you can successfully operate in.

Combination strategy
A combination strategy is a hybrid of the previous three strategies to create your business model.
Its main purpose is to increase the company's performance and find out which areas of your
company can grow and retract based on market conditions. This approach makes it easier for you
to make adjustments to your strategy because you can be more flexible with your time and how
much should be allocated to each function of your strategy.

Characteristics of a corporate-level strategy

Diversification

Diversification is when you notice that you need to change the market you're operating in.
Moving into new markets allows you to create new business opportunities with clients. It can
give you the chance to build a long-lasting relationship linked to the execution and satisfaction of
the products and services you render. If you have enough capital, you can try rebranding on
shifting your services to a new target audience eager to try a new product.

Forward or backward integration

Forward integration is when you take the position of a company that served a previous role in
your supply chain. Your business becoming a distributor changes the scope of your operations
and you'll need to move resources to help move and store products for companies in your area.
Backward integration means that you start in the supply chain business and you move to be a
supplier of goods and services. You may have to produce more products to adapt to the change in
your business.

Horizontal integration

Horizontal integration happens when a business merges with another in the same vertical. If you
merge with another company, you'll need to make sure you have the operational capacity to
handle the merger and work with new employees eager to learn your process and how they differ
from the company you acquired.

Profit

This strategy is only dedicated to having more capital to spend once you take out your expenses.
You may need to reduce costs or expenses, selling investments like stocks and bonds, increase
the price of services you sell to your customer based and cutting back on non-essential services.

Turnaround

Turnaround refers to increasing the effectiveness of existing products, so you can sell more of
them. This may require you to boost your testing processes and raise your quality assurance
standards to generate more profit.

Divestment
Divestment is a retrenchment strategy that is aimed to resolve problems and enhance your
business results. You start by selling high-performing stock and paying off debts to raise money
and report favorable financial information to internal and external stakeholders.

Liquidation

Liquidation is the final option you can take if you own a company. You'll make this move after
you exhausted all options to increase the profits of your business. This results in the selling of
your company to another entity and the conclusion of production for all product lines.

Concentration

Concentration is an expansion strategy approach that adds more market shares to the industry
you're operating in. It's viewed as a high-reward strategy because of the market demand for the
industry you're getting involved in.

Investigation

The investigation is the process of testing expansion and retrenchment strategies. You'll know
which strategy to move forward with after you decide to prioritize your performance or
readjusting the scope of your business.

No change

Lastly, no change is often correlated with your stability strategy. It's important to highlight where
you need to upgrade your product to ensure usage and brand loyalty from consumers.

Horizontal Integration
When a company wishes to grow through horizontal integration, its primary goal is to acquire a
similar company in the same industry. Other goals include increasing in size, creating economies
of scale, increasing market power over distributors and suppliers, increasing product or service
differentiation, expanding the company's market or entering a new market, and reducing
competition.

For example, if a department store wants to enter a new market, it may choose to merge with a
similar one in another country to start operations overseas. The goal of doing so would be to
 create more revenue after the merger. Ideally, the company would make more money than when
they were two independent companies.

A newly-merged company can cut down on costs by sharing technology, marketing efforts,
research and development (R&D), production, and distribution.

What We Like
 Pros
 Increased market share
 Larger consumer base
 Increased revenue
 Reduced competition
 Synergistic efforts (combined marketing efforts, technology, etc.)
 Create economies of scales and economies of scope
 Reduce production costs

What We Don't Like

 Cons
 High level of scrutiny from government agencies
 Creation of a monopoly
 Higher prices for consumers
 Less options for consumers
 Reduced flexibility for the new, larger company
 Lack of alignment between company values destroys overall company value

Vertical Integration 
A company that undergoes vertical integration acquires a company operating in the production
process of the same industry. Some of the reasons why a company may choose to integrate
vertically include strengthening its supply chain, reducing production costs, capturing upstream
or downstream profits, or accessing new distribution channels. To accomplish this, one company
acquires another that is either before or after it in the supply chain process. Not only does vertical
integration increase profits from the newly acquired operations by selling its products directly to
consumers, but it also guarantees efficiencies in the production process and cuts down on delays
in delivery and transportation.

Backward Integration
Companies can integrate vertically in two ways: backward or forward. Backward
integration occurs when a company decides to buy another company that makes an input product
 for the acquiring company's product. For example, a car manufacturer is pursuing backward
integration when it acquires a tire manufacturer.

Forward Integration
Forward integration occurs when a company decides to take control of the post-production
process. So, the car manufacturer in the previous example may acquire an automotive dealership
through the process of forward integration—acquiring a business ahead of its own supply chain.
This gets the manufacturer closer to the consumer and gives the company more revenue.

What We Like
 Pros
 Increase sales
 Reduce costs across various parts of production
 Ensure tighter quality control
 Better flow and control of information across the supply chain
 Better control over production volume

What We Don't Like

 Cons
 Concentrates resources and prospects in one approach
 High organizational and coordination costs