03-07-2013, 02:36 PM
The concept of corporate strategy
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Corporate strategy is the pattern of major objectives , purposes or goals and essential policies and plans for achieving these goals , stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be.
Stanford research institute definition is “strategy is the ways in which the firm, reacting to its environment, deploys its principal resources and marshals its main efforts in pursuit of its purpose.
The strategic decision is concerned with the long-term development of the enterprise. It necessarily projects continuously into the future. Therefore the central character and its individuality of a business organization must be determined with clarity.
Corporate strategy has two equally important aspects—formulation and implementation.
What a strategy should be is a rational decision.
The formulation of strategy has as its sub activities--
1. identifying opportunities and threats in its environment and attaching some risk to the alternatives—market opportunity
2. appraise the company’s strengths and weaknesses—assess capacity to take advantage of perceived markets or cope with attendant risks—called economic strategy—corporate competence and resources
3. Consideration of the preference of the chief executive and his immediate associates.--- personal values and aspirations
4. Taking the decisions in light of the company’s acknowledged obligations to segments of society.—societal obligations.
The implementation of strategy is composed of a series of sub activities which are primarily administrative.