Category: Corporate Strategy

A corporate strategy determines which market/s a company will serve, the segment/s within the value chain that will be served and the business model to generate earnings to eventually exceed that of peers on a sustainable basis. When a company answers all three questions above it determines what kind of company it will be. A new strategy may require little changes from the existing strategy.

On the other hand, where there is a significant change the company must determine how it will transition away from the old business, fund the transition, organize itself during and after the transition, and attract the talent to make the transition. These questions are normally part of the implementation planning but are considered as part of the corporate strategy.

Corporate strategy is ultimately a bet that the selected markets will be sufficiently attractive, large and growing in the foreseeable future. It is a bet because there is no tool/analysis that can predict with absolute certainty whether the selected market/s will meet these criteria.

A common mistake in corporate strategy is to suggest minor tweaks to the existing strategy even though the underlying business model no longer works and the market has changed. Normally, this is justified as being an implementable strategy.

When a business needs to completely change its customers, products to serve those customer and business model to generate earnings, there is hesitancy to do this because the change is hard to implement. Therefore, a corporate strategy that is hard to implement, but is necessary, may be unpopular to hear and upset clients.