Business

Organization

CxO Level KPIs

Strategy

Corporate Strategy pertains to organization as a whole

Competitive Strategy pertains only to business units

Corporate Strategy

Corporate Strategy concern two questions:

What businesses corporation shall be in
How the corporate office shall manage the

businesses
Corporate Strategy ensures 1+1=3 P&G and Gillette Faysal Bank & ABN Amro KASB Bank, Arif Habib Bank

Premises of Corporate Strategy

Competition occurs are Business Unit Level

Diversified companies do not compete; only

their business units do

Diversification adds costs and constraints to business units

Explain decisions to top management Spend time complying with planning Live with parent company guidelines

Shareholders can diversify themselves

4 Concepts of Corporate Strategy

Portfolio Management Restructuring Transferring Skills Sharing Activities

Concepts of Corporate Strategy

Portfolio Strategy
Classify businesses based on Cash Flow and

Growth An increase in market share requires cash input to finance increased advertising expense, additional capacities, and working capital
Dettol / Reckitt Benkizer

Pepsi & Snack example

Ufone, Mobilink & Telenor example

Portfolio Management

Assumptions:
Margins and cash generated depends on Market Share Product Sales growth requires cash input to finance added

capacity, working capital and other needs

An increase in market share requires cash input to finance

increased advertising expense, additional plan and cost reducing equipment

Growth will ultimately slow at maturity and cash generated

must be invested somewhere else

Concepts of Corporate Strategy

Restructuring
Seeks undeveloped, sick & threatened

organizations Changes unit management Shifting strategy Infuse new technology Sells off organization after success

Pakistan Steel, MCB Bank, UBL & HBL

Concepts of Corporate Strategy

Transferring Skills
The activities involved in business are

similar The transfer to skills involve activities important to competitive advantage Skills transferred represent significant competitive advantage. Skills are both advanced and proprietary.
Nestle

Concepts of Corporate Strategy

Sharing Activities
Sharing activities among value chain
P&G employees common physical

distribution system and sales force Enhances competitive advantage by lowering costs A shared order processing system may lower costs Activities shall be significantly important