Corporate Level Strategy

Lecture by:
 A corporate-level strategy is when a business makes a
decision that affects the whole company.
 A corporate-level strategy affects a company's finances,
management, human resources, and where the products
are sold.
 The purpose of a corporate-level strategy is to maximize
its profitability and maintain its financial success in the
future.
 A corporate-level strategy is utilized to help increase
competitive advantage over its competitors and to
continue to offer a unique product or service to
consumers.

Source: study.com
Stability Strategy
 Stability Strategy is a corporate strategy where a company
concentrates on maintaining its current market position.
 A company that adopts such an approach focuses on its
existing product and market.
 A few examples of this strategy are offering the same
products to the same clients, not introducing new
products, maintaining market share, and more.
 Usually, a company that is satisfied with its current market
share or position uses such a strategy.
 Also, a company following this strategy does not need any
additional resources and work using the existing expertise
of the workforce.
 But, this strategy is useful only if there is a simple and
stable environment.
Source: efinancemanagement.com
 WHY ANY COMPANY ADOPTS STABILITY STRATEGY?
•If a firm plans to consolidate its position in the industry in which it is operating.
•In case a country in which the company operates is facing recession or slowdown, and the company
wants to save cash rather than spend it for expansion purposes.
•If a company has significant debt or loans, then also it may pursue such a strategy than going for
expansion. Following such an approach would ensure that a company has the cash to pay the interest
and principal amount as well.
•The industry in which the firm functions have hit maturity, and there is no more scope for growth.
•Another scenario is when the cost of expansion is less than the gains from it.
•If the management is happy with the current market position and the level of profit achieved.
•Risk-averse management may also favor such a strategy.
•A company can also choose this strategy post-merger. In such a case, this strategy allows a smooth
transition of the new entity before the company starts making significant changes.
•This strategy could help a company take rest following a fast growth in the past few years. Such a
tactic allows the company to consolidate the results and resources and plan its next moves.
•Family-owned businesses may decide to slow down in adverse market conditions. They do this to
avoid any loss of financial control.

Source: efinancemanagement.com
TYPES OF STABILITY STRATEGIES

NO-CHANGE STRATEGY

MODEST GROWTH STRATEGY

SUSTAINABLE GROWTH
STRATEGY
PROFIT STRATEGY

PAUSE STRATEGY
Source: efinancemanagement.com
NO-CHANGE STRATEGY
As the name suggests, a company following this
strategy does not take up any new activities. Instead,
the company continues with its current business.
Companies that are well established may go for this
strategy.

Source: efinancemanagement.com
MODEST GROWTH STRATEGY
Under this, a company strives to achieve the same
target as it did in the past. For example, if a company
hit a 5% growth last year, then for the current year
also, it targets the same percentage (making
adjustments for inflation). It is the most relaxed
approach as the risk is low, and the company does not
need any additional efforts or resources

Source: efinancemanagement.com
SUSTAINABLE GROWTH STRATEGY
A company follows this strategy if it believes the
external environment is not favorable. For instance,
if the economy is in recession, or if there is a lack of
financial resources.

Source: efinancemanagement.com
PROFIT STRATEGY
If the objective of a company is to generate cash, then
a company may adopt this strategy. A company
pursuing this strategy may be willing to give up some
of its market share to make cash.

Source: efinancemanagement.com
PAUSE STRATEGY
A company adopts such a strategy if, in the past, it has
enjoyed rapid growth. By using this strategy, the
company wants to take some rest before pushing for
growth again. Or, we can say, a company moves
cautiously for sometime before pursuing growth. It is a
temporary strategy. A company can use the rest
period to make its production more efficient to exploit
future opportunities.

Source: efinancemanagement.com
Example:
Dell used the stability strategy after rapid growth in
its E-retailing. Its operations spread to 95 countries,
sales hit $2 billion, and the number of employees grew
to about 6000. At such a time, the company had to
slow down to restructure its operations as it was not
ready to handle such growth.

Source: efinancemanagement.com
Following are its advantages:
 Adopting this strategy does not disrupt the routine
work.
 This strategy is less-risky unless a company faces
terrible conditions.
 It allows the company to rethink its long-term
strategies.

Source: efinancemanagement.com
Following are its disadvantages:
 Such a strategy is not effective in the long-run. In
the long-run, it could make the company irrelevant
or outdated.
 There remains no incentive for any innovation.1–3

Source: efinancemanagement.com
Growth Strategy
 A growth strategy is a plan of action that allows you to
achieve a higher level of market share than you currently
have.
 Contrary to popular belief, a growth strategy is not
necessarily focused on short-term earnings—growth
strategies can be long-term, too.

Source: www.yourarticlelibrary.com
Growth Strategy
 A growth strategy is a plan of action that allows you to
achieve a higher level of market share than you currently
have.
 Contrary to popular belief, a growth strategy is not
necessarily focused on short-term earnings—growth
strategies can be long-term, too.

Source: www.yourarticlelibrary.com