Chapter content

5.1Corporate Level Strategy

Major corporate strategies
Growth, Stability & Defensive Strategies
5.2 Business level strategy
The five generic competitive strategies (Detail=chap 6)
5.3 Functional Level Strategy (Detail=chap 6)
 5.1 Corporate level strategies
 A corporate-level strategy specifies actions a firm takes to gain a
competitive advantage by selecting and managing a group of
different businesses competing in different product markets.
 Corporate-level strategy is concerned with two key issues:
 In what product markets and businesses the firm should compete?
And
 How corporate headquarters should manage those businesses?
 A corporate-level strategy is expected to help the firm earn above-
average returns by creating value.
 5.1 Corporate level strategies …
 Product diversification, a primary form of corporate-level
strategies, concerns the scope of the markets and industries
in which the firm competes as well as “how managers buy,
create, and sell different businesses to match skills and
strengths with opportunities presented to the firm?’’
 Levels of diversification: Low, moderate, and High levels
 What do you think are the reasons for diversification?
Reasons for diversification
Types of Strategies
Alternative strategies can be categorized into thirteen actions:—
1. Forward integration,
2. Backward integration,
3. Horizontal integration,
4. Market penetration,
5. Market development,
6. Product development,
7. Concentric diversification,
8. Conglomerate diversification,
9. Horizontal diversification,
10. Retrenchment,
11. Divestiture,
12. Liquidation , and
5.1 Corporate level strategies …
Try to contextualize the different
corporate strategies to companies
in Ethiopia
 5.2 Business Level Strategy
Focuses on improving competitive position of company’s products or
services within the specific industry or market segment.
 Competitive Strategy –

 Low cost
 Differentiation

 Direct competition

 Focus on niche

 Balance of the 4
 5.3 Functional and Operational Strategies
▪ Concern with organization’ s internal resources and processes which
effectively deliver the corporate and business strategic direction.
 Functional strategies are interrelated.

 Functional strategies e.g.: purchasing & materials

management, production, finance, R&D, HR, IT, and

marketing.
▪ Example: Purchasing and materials management:
- Buying materials in quantity, quality and cost which
correspond with the corp. generic strategies (Business Unit strategies).