Corporate Strategy

What is corporate strategy?

• the choice of direction of the firm as a whole and the management of its business or product portfolio and concerns

• management views its product lines and business units as a series of investments from which it expects a profitable return

• emphasizes the improvement of operational efficiency when the corporation’s problems are pervasive but not critical

• expansion of operations into other geographic locations and/or increasing the range of products and services offered to current markets

General Motors was example of which strategy?

• Growth

• Stability

• Retrenchment

Merger - is ...

• management can still obtain a good price for its shareholders and the employees can keep their jobs by selling the company to another firm

• effort to quickly “stop the bleeding” across the board but in size and costs

• a transaction involving two or more corporations in which both companies exchange stock in order to create one

  new corporation

• company gives up management of the firm to the courts in return for some settlement of the corporation’s obligations

3 Key Issues that Corporate Strategy Addresses

• Turnaround Strategy, Contraction, Consolidation

• Directional Strategy, Portfolio Analysis, Parenting Strategy

• Captive Company Strategy, Sell-out Strategy, Divestment

• Quasi-integration, Horizontal growth, Horizontal Integration

What is benefit of Vertical Integration?

• Expensive

• Reduces flexibility

• Economies of scale

• Loss of focus

Snapchat was a good example of ...

• Liquidation

• Vertical Integration

• Vertical Growth

• Bankruptcy

Under full integration, a firm internally makes ...% of its key supplies and completely controls its distributors.

• 5%

• 0,05%

• 95,5%

• 100%

Large multi-business corporations compete against other large multi-business firms in a number of markets

• Multipoint competition

• Quasi-integration

• Horizontal strategy

• Merger