Corporate strategy as a business concept is setting the corporate direction of your business and then planning out how to achieve it. Corporate strategy enables corporate managers to evaluate, asses, choose and implement the right development tools to drive business growth. Corporation is always involved with the business-related performances and profitable growth to create value for their shareholders.
Corporate strategy and developing strategic business plan are terms thatapply to businesses of all sizes and industries. Corporate strategy development and strategic planning are strategic key activities that ensure corporations understand their competitive environment and respond appropriately to them. These business activities ensure businesses are sustainable, profitable and grow into the future.
Business growth does not mean just getting a short-term advantage over competitors, but taking your business to new phase of growth, superior profitability and then sustaining it.
Corporate Strategy Elements
Companies have been constantly faced with the volatile, uncertain, complex and ambiguous (VUCA) business environment, especially in a time of crisis. When setting up a business, your corporate strategy acts as a guide to direct and ensure you achieve your business goals and deliver outstanding results. It also helps you work more efficiently and effectively to overcome obstacles, test ideas and stay motivated in the rapid changing and uncertain environment. A solidcorporate strategic business plan is the cornerstone of a successful enterprise.
The strategicmindsets and key elements can be broken down into 5 key strategic imperatives to create a solid corporate strategy.
1.A Corporate Well-Being
To know your corporate’s future direction and objectives, you must understand your current corporate situation. Examine each area of your business respectively (i.e. marketing, finance, information technology, human resources, manufacturing, etc.) to identify and evaluate what is doing well, what can be improved and to capture future opportunities.An effective framework or matrix to do this is the Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. The SWOT analysis helps you to identify your corporate’s strengths and weaknesses, while discovering potential opportunities to pursue and threats to avoid.
2.Values
Many companies consider values to market the business, rather than guiding its actions. Your corporate values can determine whether your strategic plan succeeds or fails. First of all, values help you develop an honest reflection of your corporate’s strengths and your accomplishments. Secondly, they truly guide your decision-making, by deciding on which actions are appropriate for your company. And last but not least, values help you attract employees who share your beliefs and ambitions.The values in your corporate strategic business plan are a self-assessment of how you want the business to act and behave as you achieve your vision, mission and goals.
3.Vision Statement
A good vision statement usually answers this question: “What is the ultimate destination for the corporate?” A well-crafted vision statement outlines what your company will achieve over time. This vision statement strongly helps and drives you to:
- Affirm everyone’s efforts to achieve a common goal
- Create clear, cohesive, tangible strategies and goals and;
- Attractand motivate employees, stakeholders and investors to invest in your company and stay focused and committed.
Clearly stated strategic outcomes are the cornerstone of any successful corporate strategy. Vision and mission statements are a great place to start and strategize. However, clearly articulated outcomes enable you to identify and act towards the steps to achieve your corporate goals.
When developing business outcomes, this formula can be used: Action +Metric + Unit + Deadline. Usually expressed as a statement, this is how a sample outcome may look: “Expand our geographical operations into ASEAN markets and grow our business by 30% by 30th June 2021”.
5.Key Performance Indicators (KPIs) and Balance Score Card
Key Performance Indicators (KPIs) areimportant measures of your corporate strategy.You can’t manage what you can’t measure, hence Managers use and link value targets through corporate objectives and strategies, to development of KPIs and a balance score card.Without KPIs you won’t know whether you’re successfully achieving your corporate vision and executing your strategy effectively. Essentially, KPIs track how well you are achieving and delivering standards of your mission.
Build Company Growth Capabilities
Firms tirelessly pursue business growth as they want to create value for the shareholders, stakeholders and investors. They want to realize their strategic aspirations and challenges in building their growth capabilities. Building a successful corporation means knowing how to define their corporate strategy and choosing the best growth options. But it’s not easy, growth can be hard to achieve, expensive and can destroy value. Companies have to manage their cost in a more strategic way, allowing them to cut costs and grow stronger at the same time. They have to re-assess strategic priorities across the value chain to thrive in the new normal.
Corporations need to understand the challenges involved in driving growth through external means, such as mergers and acquisitions, joint ventures, partnerships and strategic alliances, and the strategies that will empower their corporation to resolve these challenges, capture opportunities and create synergies as well as economies of scale.
Companies need to define their optimal portfolio of businesses and effective growth capabilities that deliver results. They must enhance their internal and M&A capabilities through acquisitions with greater value creation potential, at the right price and with the right deal structure to continue growing and delivering results successfully.
