Strategic Management: Formulation and Implementation

Corporate-level Strategy

Corporate-level strategic decisions deal primarily "with answering the question: what business should we be in? Consequently, scope and resources deployments among businesses are the primary components of corporate strategy" (Hofer and Schendel).

Corporate strategy is developed in response to the following questions:

  1. What business or businesses are win? The answer to question one should define the company's mission (or the mission of each business in its portfolio).
  2. Will our current or businesses enable us to achieve long and short-run strategic objectives, particularly growth, profitability, and financial performance? In answering question two, strategists would determine whether the company's current business activities are capable of generating the desired level of performance by strategic objectives.
  3. Should we get into new businesses that will enable us to achieve our strategic objectives? If it is found that a substantial gap is likely to develop between the expected and desired levels of performance from the current set of businesses, the only viable choice is to answer question three with a yes and diversify into other businesses.
  4. Which and how many resources do we have at our disposal now; which and how many resources that could be allocated to our businesses are we capable of garnering in the near future? In answering this question, the company strategists determine the availability of resources now and in the foreseeable future.
  5. Which and how many of our resources should we allocate to each of our businesses? Are there any businesses that do not deserve to receive resources in the future at the same level as in the past?