What Is a Corporate-Level Strategy? (With Examples)

A corporate-level strategy can be instrumental in outlining your company's goal for the following year. You need to break down all steps that make it clear for your employees the path they're supposed to take. The type of corporate-level strategy you select can be an indicator of the company's financial success and the method they take to generate profits.

In this article, we define what corporate-level strategy is, the types of corporate-level strategies that you can have for your business and characteristics of a corporate-level strategy.

Related: What Is Strategic Planning? Definition, Techniques and Examples

What is a corporate-level strategy?

A corporate-level strategy is a multi-tiered company plan that leaders use to define, outline and achieve specific business goals. A corporate-level strategy can be used by a small business to increase its profits over the next fiscal year, whereas a large corporation might be overseeing the operations of multiple businesses to achieve more complex goals like selling the company or entering a new market.

Read more: Operations Management: Everything You Need to Know

Types of corporate-level strategy

When you're constructing your company's corporate-level strategy, you're seeking the best ways to evenly distribute resources to serve the needs of the company to complete planned objectives. It can also help you come up with a contingency plan, you remain prepared to work under unforeseen circumstances.

Let's review the different types of corporate-level strategies that you can employ:

Stability strategy

The stability strategy is when you proceed in working with clients in your industry. This strategy also assumes that your company is doing well under this current business model. Since the pathway to growth is uncertain, you should employ a stability strategy to ensure incremental progress that still brings in revenue, which includes practices such as research and development and product innovation. An example can be offering free trials of your existing products to your target audience to increase its engagement.

Expansion strategy

The expansion strategy is great for you if your company is planning on creating new products and reaching new audiences. It can also be used if you're upgrading the level of activity within your business like taking on new clients and hiring more employees. You can apply this strategy if the region you're operating in has a strong economy or if your focus is to enhance your performance. Overall, this strategy has large earnings potential for executives, which can lead to raises and expansion to employee benefits packages as well.

Retrenchment strategy

A retrenchment strategy requires you to strongly consider switching your business model. This may involve stopping the manufacturing of a product or reducing its functionality. You may need to allocate more energy to accounts receivable to ensure you're still getting payments of services you provided to maintain your organization's cash flow.

This strategy is only used when the company is looking to take protective measures in keeping the solvency of the business. You should compile a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to see which marketing you can successfully operate in.

Combination strategy

A combination strategy is a hybrid of the previous three strategies to create your business model. Its main purpose is to increase the company's performance and find out which areas of your company can grow and retract based on market conditions. This approach makes it easier for you to make adjustments to your strategy because you can be more flexible with your time and how much should be allocated to each function of your strategy.

Read more: Understanding the Basics of Strategy Development

Characteristics of a corporate-level strategy

When you're considering the corporate-level strategies you should undertake, keep these characteristic examples in mind:

• Diversification

• Forward or backward integration

• Horizontal integration

• Profit

• Turnaround

• Divestment

• Market penetration

• Liquidation

• Concentration

• Investigation

• No change

Diversification

Diversification is when you notice that you need to change the market you're operating in. Moving into new markets allows you to create new business opportunities with clients. It can give you the chance to build a long-lasting relationship linked to the execution and satisfaction of the products and services you render. If you have enough capital, you can try rebranding on shifting your services to a new target audience eager to try a new product.

Forward or backward integration

Forward integration is when you take the position of a company that served a previous role in your supply chain. Your business becoming a distributor changes the scope of your operations and you'll need to move resources to help move and store products for companies in your area. Backward integration means that you start in the supply chain business and you move to be a supplier of goods and services. You may have to produce more products to adapt to the change in your business.

Horizontal integration

Horizontal integration happens when a business merges with another in the same vertical. If you merge with another company, you'll need to make sure you have the operational capacity to handle the merger and work with new employees eager to learn your process and how they differ from the company you acquired.

Profit

This strategy is only dedicated to having more capital to spend once you take out your expenses. You may need to reduce costs or expenses, selling investments like stocks and bonds, increase the price of services you sell to your customer based and cutting back on non-essential services.

Turnaround

Turnaround refers to increasing the effectiveness of existing products, so you can sell more of them. This may require you to boost your testing processes and raise your quality assurance standards to generate more profit.

Divestment

Divestment is a retrenchment strategy that is aimed to resolve problems and enhance your business results. You start by selling high-performing stock and paying off debts to raise money and report favorable financial information to internal and external stakeholders.

Liquidation

Liquidation is the final option you can take if you own a company. You'll make this move after you exhausted all options to increase the profits of your business. This results in the selling of your company to another entity and the conclusion of production for all product lines.

Concentration

Concentration is an expansion strategy approach that adds more market shares to the industry you're operating in. It's viewed as a high-reward strategy because of the market demand for the industry you're getting involved in.

Investigation

The investigation is the process of testing expansion and retrenchment strategies. You'll know which strategy to move forward with after you decide to prioritize your performance or readjust the scope of your business.

No change

Lastly, no change is often correlated with your stability strategy. It's important to highlight where you need to upgrade your product to ensure usage and brand loyalty from consumers.