Essay on Corporate Strategy: Key Aspects, Examples, and Strategies

This essay delves into the multifaceted realm of corporate strategy, defining its core purpose as a long-term vision aimed at achieving competitive advantage and maximizing corporate value. It meticulously examines key components, including resource allocation, organizational design, portfolio management, and strategic trade-offs. The essay highlights the significance of allocating resources effectively, designing optimal organizational structures, managing business portfolios, and balancing risks and returns. Real-world examples from companies like Apple, Starbucks, Nike, and Adidas are used to illustrate diversification, market development, and vertical integration strategies. The essay concludes by emphasizing how corporate strategies enable businesses to differentiate themselves and gain a competitive edge in the market. The essay follows APA format and uses multiple scholarly references to support the analysis.

Running head: CORPORATE STRATEGY
Corporate Strategy
9/6/2019

CORPORATE STRATEGY 1
Corporate Strategy
The aim of this essay is to discuss regarding the concept and important aspects of the
corporate strategy with support to the real examples. Corporate Strategy includes the
corporate action of the firm with the motive to attain the objective of competitive advantage.
A corporate strategy involves an evidently definite, long-term vision that businesses set,
searching to make corporate value and inspire the employees to execute the suitable actions
for attaining the satisfaction of the customer. Besides this, the corporate strategy is said to be
the on-going procedure that demands for the constant effort for gaining the trust of the
investors over company through their money, thus augmenting the equity of the company
(Linnenluecke & Griffiths, 2010). The key components of the corporate strategy are
discussed below:
Allocation of Resources: This component of a business mostly concentrates on two
aspects that are people and capital. In the effort to increase the entire firm’s value, leaders
should regulate how to assign these resources to the different units of the business. The
company gets involve in identifying the competencies of the employees and confirm that they
are properly distributed in the entire company. Besides this, it is also very important for the
business to ensure that capital is allocated in the business properly such that it can earn the
high return (Corporate Finance Institute, 2019).
Organizational Design – This component of the corporate strategy is comprised of
confirming that the business has the required corporate structure and associated system in
place for generating increased amount of value. Aspects that can be considered by the
business managers are role of head office and organizations structure. The head office of the
company takes important decisions and has major influence on the business unit’s strategy

CORPORATE STRATEGY 2
(Bender, 2013). On the other hand, the organizational structure defines how initiatives and
promises of the business can be divided into small parts or projects.
Portfolio Management – This component of the corporate strategy considers the way
different units of the business complement with each other, correlations and decides where
the company will take actions.
Strategic Trade-offs – The most challenging component of the corporate strategy is to
balance the trade-offs among return and risk all over the business. It is very essential to
follow a holistic view for the business and confirm that the anticipated range is risk
management and generation of the return (Hahn, Figge, Pinkse & Preuss, 2010). Under risk
management the business risk are majorly based on the strategies to select that to be pursued.
On the other hand, high risk strategies generate the possibility of the huge return rate.
Examples of the Corporate Strategies adopted by Businesses
Diversification – Diversification is said to be a strategy of risk management that
works to mix the range of investments in a single portfolio. The foundation of this technique
is that the portfolio framed of diverse types of assets on average, harvest greater long-term
returns and decreasing risk of individual security or holding (Keren, Lev-Maor & Ast, 2010).
There are number of businesses that have adopted the strategy of diversification. For instance
Apple Inc. is one of the leading businesses in the technology industry by involving in the
computer hardware, financial technology, Semiconductors, Cloud Computing, Computer
Software, Artificial Intelligence, consumer electronics, etc. (Yarow, 2018). This company
excels in all the fields where it operates its business due to its skilled and competent
workforce.

CORPORATE STRATEGY 3
Market Development – Market development is said to be the growth strategy that
classifies and develops new segments in the market for offering existing products. This
strategy of market development targets those customers that do not avail the existing offering
of the company (Gelos, Sahay & Sandleris, 2011). It also targets the new customers in the
new segment of the market. For instance, the leading footwear companies in the market such
as Reebok, Nike, and Adidas are some of the businesses who have expanded their market by
adopting the market development strategy to seek growth in terms of revenue as well as sales.
Vertical Integration – Vertical Integration is said to be a strategy where a business
holds or owns its distributors, retail locations, and suppliers for controlling its supply chain.
This strategy provides benefit to the business by enabling it to manage the procedure,
decrease costs and enhance efficiencies (Atalay, Hortaçsu & Syverson, 2014). For instance,
Starbucks makes use of vertically integrated supply chain under which it gets involve in each
step of the procedure of supply chain all over from the extraction of the coffee bean to the
cup of the coffee sold to the target audience (Fronetics, 2017).
From the above analysis, it could be concluded that corporate strategies support
businesses in differentiating itself from the competitors and attain competitive advantage in
the market as presented in the above report with the help of different examples.

CORPORATE STRATEGY 4
References
Atalay, E., Hortaçsu, A., & Syverson, C. (2014). Vertical integration and input flows.
American Economic Review, 104(4), 1120-48.
Bender, R. (2013). Corporate financial strategy 1st ed. U.S: Routledge.
Corporate Finance Institute. (2019). Corporate Strategy. Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/strategy/corporate-
strategy/
Fronetics. (2017). Supply Chain Putting the Star in Starbucks. Retrieved from
https://www.fronetics.com/supply-chain-putting-star-starbucks/
Gelos, R. G., Sahay, R., & Sandleris, G. (2011). Sovereign borrowing by developing
countries: What determines market access?. Journal of international Economics,
83(2), 243-254.
Hahn, T., Figge, F., Pinkse, J., & Preuss, L. (2010). Trade‐offs in corporate sustainability:
you can't have your cake and eat it. Business Strategy and the Environment, 19(4),
217-229.
Keren, H., Lev-Maor, G., & Ast, G. (2010). Alternative splicing and evolution:
diversification, exon definition and function. Nature Reviews Genetics, 11(5), 345.
Linnenluecke, M. K., & Griffiths, A. (2010). Corporate sustainability and organizational
culture. Journal of world business, 45(4), 357-366.

CORPORATE STRATEGY 5
Yarow, J. (2018) Apple proved that it is no longer just an iPhone company. Retrieved from
https://www.cnbc.com/2018/05/02/apple-proved-that-it-is-no-longer-just-an-iphone-
company.html