UNIT -II

Prepared by: Shiwani Sinha

Department of Management
B.N College, Patna University
Corporate strategies
A corporate strategy is a valuable tool for expanding and defining the
values of a company. Companies use corporate strategies to create and
identify long-term goals aimed toward improvement and success.A
corporate strategy is a long-term plan that outlines clear goals for a
company. While the objective of each goal may differ, the ultimate
purpose of a corporate strategy is to improve the company.
Corporate strategy is the design framework of the firm growth and
development.
 Its main objectives is the growth of the company in a particular
direction, extent, pace and timing.
 Corporate strategy involves the objectives design, implementation,
control of the objectives of firms which are helpful for growth of
companies.
It determines the company’s mission, vision and long-term
development and growth of firms.
Corporate policy depends on its corporate strategy management will
be made by strategist of the company.
Nature & Scope
Corporate strategy is basically concerned with the choice of businesses,
products and markets of the company’s. Nature, scope and concerns of
corporate strategy as outlined below:
❖ It can be involved and viewed with objectives designed framework
strategy of the firm.
❖ A strategy designed framework is filling the firm’s strategic planning
gap.
❖ Actually, it is concerned with the different choice of the firm’s
products and markets. It generally involves the changes/ additions /
deletions in the firm’s existing product market postures in businesses. It
serves the customers needs and requirements and meets and serves the
business requirement.
❖ It's able to ensure that the right fit to businesses and how to achieve
between the firm’s and its business environment.
❖ vIt helps and focuses to build up the relevant competitive advantages
for the firm’s in the market.
❖ Both corporate objectives and corporate strategy bring together and
CONCEPT OF CORPORATE STRATEGY
The word strategy is derived from the Greek word “strategtia” which
was used first around 400 B.C. This connotes the art and science of
directing military forces. In 18 19 Introduction to Corporate Strategy
business parlance, there is no definite meaning assigned to strategy.
A few definitions stated below may clarify the concept of corporate
strategy:
KENNETH ANDREWS(1955), “The pattern of objectives, purpose, goals
and the major policies and plans for achieving these goals stated in such
a way so as to define what business the company is in or is to be and the
kind of company it is or is to be” This definition refers to the business
definition.
IGOR ANSOFF(1965) explained the concept of strategy as “the common
thread among the organizations, activities and product markets, that
defines the essential nature of business that the organization was or
planned to be in future”. The definition stressed on the commonality of
approach that exists in diverse organizational activities.
FUNCTIONS OF CORPORATE STRATEGY
Corporate strategy performs the following functions:
1. It provides a dual approach to problem solving. Firstly, it exploits the
most effective means to overcome difficulties and face competition.
Secondly, it assists in the deployment of scarce resources among critical
activities.
2. It focuses attention upon changes in the organizational set up,
administration of organizational process affecting behaviour and the
development of effective leadership.
3. It offers a technique to manage changes. The management is totally
prepared to anticipate, respond and influence to look at changes. It also
offers a different way of thinking.
4. It furnishes the management with a perspective whereby, the latter
gives equal importance to present and future opportunities.
5. It provides the management with a mechanism to cope with highly
complex environment characterized by diversity of cultural, social,
political and competitive forces.
Process of Corporate Strategic Planning
Corporate Strategic Planning is a companywide approach at the business
unit and corporate level for developing strategic plans to achieve a
longer-term vision. The process includes defining the corporate strategic
goals and intentions at the top and cascading them through each level
of the organization. Many organizations confuse the annual budgeting
process with corporate planning. Corporate strategic planning should
come first and annual budgeting should be driven by the strategy, not by
prior year’s budget spend.
Strategic planning process steps
Before you begin the strategic planning process, it is important to review
some steps to set you and your organization up for success.
1. Determine your strategic position
This preparation phase sets the foundation for all work going forward.
You need to know where you are to determine where you need to go
and how you will get there.
Involve the right stakeholders from the start, considering both internal
and external sources. Identify key strategic issues by talking with
executives at your company, pulling in customer insights, and collecting
industry and market data. This will give you a clear picture of your
position in the market and customer insight.
2. Prioritize your objectives
Once you have identified your current position in the market, it is time
to determine objectives that will help you achieve your goals. Your
objectives should align with your company mission and vision.
Prioritize your objectives by asking important questions such as:
• Which of these initiatives will have the greatest impact on achieving
our company mission/vision and improving our position in the market?
• What types of impact are most important (e.g. customer acquisition
vs. revenue)?
• How will the competition react?
• Which initiatives are most urgent?
• What will we need to do to accomplish our goals?
• How will we measure our progress and determine whether we
achieved our goals?

Objectives should be distinct and measurable to help you reach your

long-term strategic goals and initiatives outlined in step one. Potential
objectives can be updating website content, improving email open rates,
3. Develop a plan
Now it's time to create a strategic plan to reach your goals successfully.
This step requires determining the tactics necessary to attain your
objectives and designating a timeline and clearly communicating
responsibilities.
Strategy mapping is an effective tool to visualize your entire plan.
Working from the top-down, strategy maps make it simple to view
business processes and identify gaps for improvement.
Be prepared to use your values, mission statement, and established
priorities to say “no” to initiatives that won’t enhance your long-term
strategic position.
4. Execute and manage the plan
Once you have the plan, you’re ready to implement it. First,
communicate the plan to the organization by sharing relevant
documentation. Then, the actual work begins.
Turn your broader strategy into a concrete plan by mapping your
processes. Use key performance indicator (KPI) dashboards to
communicate team responsibilities clearly. This granular approach
illustrates the completion process and ownership for each step of the
way.
5. Review and revise the plan
The final stage of the plan—to review and revise—gives you an
opportunity to reevaluate your priorities and course-correct based on
past successes or failures.
On a quarterly basis, determine which KPIs your team has met and how
you can continue to meet them, adapting your plan as necessary. On an
annual basis, it’s important to reevaluate your priorities and strategic
position to ensure that you stay on track for success in the long run.
Strategy formulation
Strategy formulation is the process of establishing goals and
determining the proper plan of action to achieve those goals. An
organization uses strategy formulation to plan for success and make
improvements to workplace strategies as needed. Strategy formulation
is essential for achieving and measuring the attainability of goals. After
creating strategies, an organization typically educates its employees so
they know the organization's purpose, workplace objectives and goals.
Levels of strategy formulation
In business, there are three levels of strategy. Defining a strategy for
each of these levels may help your team align your efforts and optimize
your operations. It may also help you visualize the future of the
organization and determine what steps you should take to scale your
operations along with changing market conditions. Here are the three
levels of strategy:
Corporate level: How you structure the organization and coordinate
across business units
Business level: How you target and retain customers and compete with
other organizations in your market
Functional level: How you plan to grow and improve the organization
6 steps to execute strategy formulation
When formulating a strategy, consider the following steps:
1. Develop a strategic mission
A strategic mission is a foundational statement that includes the
organization's values and long-term goals. To identify your company
values, think of practices you would like to see your employees
implementing on a daily basis. A strategic mission is a high-level
understanding of a company's purpose and philosophies, and it can
guide your strategies.
The three major components of a strategic mission are as follows:
Time: Think of where you'd like the business to be in one, five and 10
years from now. Having long-term perspective can help you identify
aspects of your strategic mission which may involve your target market,
customers and challenges.
Core values:
Understanding core values can help you decide how to achieve goals
and identify why you're working toward achieving these goals, how they
could affect the company and what outcome they may produce. A
mission often includes core values that have a deeper meaning to the
organization.
Business description:
A description of what the organization does and hopes to achieve can
also assist with developing a strategic mission. Ask yourself what
industry your organization is in, what you hope to create and how you
plan to sell your goods or services.
2. Establish organizational goals
Organization goals are actionable objectives that can bring your team
closer to achieving your strategic mission and improving your
operations. Understanding what you're working toward can help you
develop appropriate processes and procedures to reach your business
goals efficiently. To identify organizational goals, consider the following
factors:
Target market: This factor identifies a specific demographic and market
an organization would like to sell its products or services to.
Customers: Identifying purchasing habits and behaviors of target
customers is a large part of developing a business goal, so consider how
they might use your product and what factors guide purchasing
decisions.
Offerings or goods: Reflect on how you can distinguish and improve
your products or services, explore the benefits of your offerings and
determine what price point is best to sell the products or services.
Adaptation to changes and challenges:
Anticipating obstacles and planning solutions to them can help an
organization develop a plan of action to mitigate risk and excel.

3. Create departmental plans

Then, you can dissect your goals and develop a plan for each
department, team or business unit. This help you create tasks for
employees to reach company goals and improve key performance
indicators (KPIs). At this stage, you can establish numerical targets that
you aim or establish practical goals toward which you can take action.
Here are some examples of departmental goals:
• Develop and use a customer database.
• Improve workplace safety.
• Invest in customer management.
• Convert more than 10 leads per month.
• Increase company revenue by 15%.
4.Conduct a performance analysis
After gaining perspective on what to achieve, an organization might
conduct a performance analysis on internal and external departments to
assess its current performance. This may help you learn if the
organization is competitive and valuable, if its goals are attainable and if
it aligns with trends in the industry. An analysis can reveal gaps between
your stasis and your goals, and it may help you determine what
techniques are the best fit for your needs/
One common type of analysis you might perform is a SWOT analysis,
which investigates the following:
S: Strengths
W: Weaknesses
O: Opportunities for growth
T: Threats to the business
A SWOT analysis helps you objectively assess your current operations
while also making future plans. You can use this tool to identify risks,
implement management procedures and policies, reduce error and
develop realistic predictions for sales. An effective SWOT analysis can
5. Implement a plan of action
Define what methods you plan to use to active your strategy. You can
also make adjustments to your strategies as market or industry changes
occur. It may be helpful to have regular meetings with management
across all departments to discuss how the strategy applies to their
team's work. Allocate business resources accordingly so each team can
promote organizational goals
6. Revise your strategy as needed
As you implement a new strategy to reach organizational goals, be sure
to monitor your progress and consistently conduct analyses to evaluate
the effectiveness of a strategy. Using metrics to evaluate the results of
your strategy may help you make objective, data-backed decisions.
Remember to monitor industry news and relevant financial markets so
you can adapt your strategy accordingly. It's vital to set regular times to
review progress and re-evaluate strategies like every month, quarter or
year.
Project Life Cycle
Project life cycle is a workflow of activities defined in the systematic
ways to gain maximum benefits from business project. A project stands
out for its life cycle, which is usually presented as consisting of phases.
The number of phases and their designation may vary from one
application to another, from one application area to another and from
one author to another.

The project engineer will sometimes define the phases of the project
under its responsibility by taking account of parameters specific to the
project or the company culture. Project plan may keep on changing
depending on the complexity, budget and size of the project. These
differences limit in any way valid and relevance of the model. But when
we are discussing about business project management, it is highly
recommended that an engineer should follow the below four phases of
the business project life cycle structure in any type of project model.
With you follow the proper project model, it will benefit you in many
ways
Project Life Cycle Stages:
Let us understand about various stages involved in project life cycle
when we are discussing about business project management. Below
listed are the stages and phases of project life cycle.
1. Identification Phase:
This is the first stage of project life cycle. It is also known as initiation
phase. In this stage project objectives are identified and requirements
are clarified. Apart from this, business opportunities, business problems
and business needs are discussed. Further investigation is done to find
the feasibility .Once project is been approved, hiring of employees and
managers are conducted. Team are built to deliver the business project.
Finally detailed planning is been performed on the project by key
members of the projects. Here comes the next stage of project which is
planning.
2. Planning Phase:
In project planning phase, scope of the project is defined more
accurately. Once the project team is been finalized and work is been
identified, schedules of deliverables and estimated cost are been figured
out. Detailed planning is established for its duration; timelines,
resources and expenditures, as well as policies and management
procedures.
In planning stage, it is a good time to identify possible risk and prepare
the risk management strategies. Further you can create a
communication plan for project stakeholders describing risks, planning,
scope and delivery timelines. Finally after drafting and presenting
project plan, acceptance plan is been prepared by project managers. It is
assumed that all the project planning activities are been completed and
now project is ready to move to next phase of implementation.
3. Implementation, Monitoring and Controlling Phase:
This is the third stage of project life cycle. In this phase product or
service is actually carried out according to plan and in accordance with
the applicant’s requirements. Project managers keep close watch on
implementation activities, since this is one of the important stages of life
cycle. During this stage, team carry-on with task assigned to them and
daily status report is been presented to management to track the
activities and schedule of the activities. Apart from this stakeholder are
also been communicated on the activities on regular basis.
4. Closure Phase:
This is the final stage of project life cycle. In this stage product or service
is been delivered to customer or a client for evaluation. Project
documentations like user manuals and other documents are been
handed over to the client. All key members and stakeholders are been
communicated regarding closure of the project. Lastly, documentation
of lessons learn is been prepared by team members for the purpose of
examinations and self learning for the future projects.
Portfolio Analysis
Portfolio analysis in strategic management involves analyzing every
aspect of product mix to identify and evaluate all products or service
groups offered by the company on the market, to prepare the detailed
strategies for each part of the product mix to improve the growth rate.
It can also be used to make a strategic decision about strategic business
units. Portfolio analysis in strategic management has, as its major
objective, the optimal gathering of the resources among the business
activities comprising a diversified business portfolio.
1. Analysis
The organization’s first reason to conduct a portfolio analysis in strategic
management is to determine every product mix’s current position and
determine which SBUs (strategic business unit) need more or less
investment. Management needs to create the organization’s entire
portfolio to analyze the present opportunities and threats to the market
and the product.
2. Formulate Growth Strategy
Another aspect that management wants to formulate from the portfolio
analysis in strategic management is the growth strategy. According to
other products and markets, they develop a different strategy according
to their potential threats and opportunities. Portfolio analysis in
strategic management helps in laying down the strategy of expansion as
well .
3. To Take Decisions Regarding Product Retention
Another reason for corporate portfolio analysis in strategic management
is to determine the life of the product i:e, to determine which product
should be retained longer and which product should be removed from
Step 1: Identify Lines Of Business
The first step of business portfolio analysis in strategic management is to
identify all the current business lines and strategic business units.
Step 2: Group Lines Of Business
An organization has three levels of business operation, which are:
• broad membership – directly support the objectives in the strategic
plan
• support functions – deliver the core business benefits to members
• money-makers – the source of revenues which support core
businesses

Step 3: Compare Core Businesses With Mission

After separating the activities, the next step in portfolio analysis in
strategic management is to compare the core starts with vision and
mission and defined goals and objectives. The business should directly
support the statements. If the comparison differs, then companies
should discontinue allocating the resources in that sector.
Step 4: Define Products In Each Line Of Business
The next step of portfolio analysis in strategic management is to
categorize each relevant product line I;e, subdivide, and define each
product relevant product line.
Step 5: Apply The Program Evaluation Matrix
The Program Evaluation Matrix helps in determining the fundamental
question of portfolio analysis in strategic management, which are:
• Good fit with our other programs?
• Easy to implement?
• Low alternative coverage in the marketplace?
• Is competitive position strong?

Step 6: Determine The Alternatives

At this stage, identification of alternatives is made i:e the competitors.
Identification of similar products and their coverage area in the market.
And the coverage is classified into:
Low coverage – few comparable programs offered elsewhere.
High coverage –many similar programs are offered elsewhere.
Step 7 Determine Program Fit
Ideally, the association will be segregated into two types of programs:
1.Well-fitting, accessible programs where the association has a strong
position and competes aggressively for a dominant position.
2. Well-fitting, difficult programs with low coverage that the
association has the unique, strong capability to provide to essential
stakeholders.
SWOT
SWOT Analysis is the most renowned tool for audit and analysis of the
overall strategic position of the business and its environment. Its key
purpose is to identify the strategies that will create a firm specific
business model that will best align an organization’s resources and
capabilities to the requirements of the environment in which the firm
operates.
In other words, it is the foundation for evaluating the internal potential
and limitations and the probable/likely opportunities and threats from
the external environment. It views all positive and negative factors
inside and outside the firm that affect the success. A consistent study of
the environment in which the firm operates helps in
forecasting/predicting the changing trends and also helps in including
them in the decision-making process of the organization.
An overview of the four factors (Strengths, Weaknesses, Opportunities
and Threats) is given below-
1. Strengths - Strengths are the qualities that enable us to accomplish
the organization’s mission. These are the basis on which continued
success can be made and continued/sustained. Strengths can be either
tangible or intangible. These are what you are well-versed in or what
you have expertise in, the traits and qualities your employees possess
(individually and as a team) and the distinct features that give your
organization its consistency.
Strengths are the beneficial aspects of the organization or the
capabilities of an organization, which includes human competencies,
process capabilities, financial resources, products and services,
customer goodwill and brand loyalty. Examples of organizational
strengths are huge financial resources, broad product line, no debt,
committed employees, etc.
2. Weaknesses –
Weaknesses are the qualities that prevent us from accomplishing our
mission and achieving our full potential. These weaknesses deteriorate
influences on the organizational success and growth. Weaknesses are
the factors which do not meet the standards we feel they should meet.
Weaknesses in an organization may be depreciating machinery,
insufficient research and development facilities, narrow product range,
poor decision-making, etc. Weaknesses are controllable. They must be
minimized and eliminated. For instance - to overcome obsolete
machinery, new machinery can be purchased. Other examples of
organizational weaknesses are huge debts, high employee turnover,
complex decision making process, narrow product range, large wastage
of raw materials, etc.
3. Opportunities –
Opportunities are presented by the environment within which our
organization operates. These arise when an organization can take
benefit of conditions in its environment to plan and execute strategies
that enable it to become more profitable. Organizations can gain
competitive advantage by making use of opportunities.
Organization should be careful and recognize the opportunities and
grasp them whenever they arise. Selecting the targets that will best
serve the clients while getting desired results is a difficult task.
Opportunities may arise from market, competition,
industry/government and technology. Increasing demand for
telecommunications accompanied by deregulation is a great
opportunity for new firms to enter telecom sector and compete with
existing firms for revenue.
4. Threats –
Threats arise when conditions in external environment jeopardize the
reliability and profitability of the organization’s business. They
compound the vulnerability when they relate to the weaknesses.
Threats are uncontrollable. When a threat comes, the stability and
survival can be at stake. Examples of
threats are - unrest among employees; ever changing technology;
increasing competition leading to excess capacity, price wars and
reducing industry profits; etc.
Advantages of SWOT Analysis
a. It is a source of information for strategic planning.
b. Builds organization’s strengths.
c. Reverse its weaknesses.
d. Maximize its response to opportunities.
e. Overcome organization’s threats.
f. It helps in identifying core competencies of the firm.
g. It helps in setting of objectives for strategic planning.
h. It helps in knowing past, present and future so that by using past and