CORPORATE
STRATEGY
Companies with Diversified
Business Strategy Has Two Levels
Corporate strategy is the existence in the
midst of the right business mix.
Problems encountered in corporate level
strategy are:
1. The definition of a business in which
the company will participate
2. Assignment of resources among these
businesses
 The level of corporate strategy analysis resulted in decisions involving the
business to be added, the businesses will be maintained, the business will be
emphasized, the business to be divested.
corporate level strategy, companies can be classified three categories:
1 The Company operates in a single industry with one business.
2.-related diversified company with operations in several industries.
3 Companies with unrelated businesses operate in businesses that do not
relate to each other.
4 Core Competence and Corporate Diversification
5. business units of the company with related diversification may be even
worse when broken up into separate companies.
6 Companies with unrelated diversification, on the other hand has no
operating synergies.
7 Implications of Control System Design
8. Terms of planning and control of companies that use corporate level
strategies are different . Key control problem system designers is how to
control the shape of structure and will differ among the three types of related
companies.
Corporate strategic needs ????
 Mastery of business strategy
 The relationship between business units and companies
(center)
 Configuring the scope of the market
 Coordination between business units of the company
3 Direction Corporate Strategy
 (Growth Strategy)
"Org how to move forward"
 (Stability Strategy)
"How to keep a stable org"
 (Renewal Strategy)
"How to reverse the org performance tends to decline "
Growth strategy
 concentration strategies
"How to increase the growth of the organization to concentrate
on its core business"
 Vertical Integration Strategy (forward and backward)
"How do companies gain control over their
inputs (backward) or output (forward) “
 Horizontal Integration Strategies
"How to expand the company's operations by combining the
company with another company (merger) .."
 Diversification strategy
"How to expand its operations by moving to a different industry
.."
2 Main Types Diversification
 Related Diversification (Concentric)
Diversified businesses in different industries, but one of them
was related in some way to the company's operations are still
ongoing.
 Not Related diversification (conglomeration)
Enterprise of diversified business operations are conducted
in a completely different industry.
Selection Strategy Can Be Taken
Companies in Diversification:
 Concentric diversification
Building trust shareholders by adding strategic business in
accordance with the company:
-Transferring expertise and capabilities from one business to
another business
-Sharing Facilities and resources to reduce costs advancing
the usefulness of an existing brand name
-Combining resources to create strength and new
competitive advantage.
Diversified conglomerates :
-Spreading Risk into different
business
-Building Trust with shareholders do a
good job in choosing a business to
diversify and control the entire
business in portfolio companies.
Why Companies Diversify ??
 External Incentives
The encouragement of the opportunities and threats that led
the company to diversify into business / new product
 Internal Incentives
The condition of the company urged to diversify. Engaged
and exploit its resources
Is a strategy in which the
organization maintains the size of
the organization and the level of
business operations today.
When to apply ??
1. Industry condition can not be predicted
2. bit growth opportunities in the industry
3. Advantage and performance are at
4. Maturity
Renewal strategy
 Strategies to address the decline in the company's
performance.
The cause of performance degradation:
-Growth too fast or expansion
too big
financial-control is not good
Uncontrolled -charge / too big
new -pesaing
-change in consumer demand is predictable
-Slow or does not respond to external changes
or significant internal
Two types renewal strategy
 Reduction (retrenchment)
Short-term strategy designed to overcome the weaknesses
of the organization which resulted in a decrease in the
performance of the organization.
Turn the bow (turnaround)
The strategy is designed to cope with the situation gets
worse when the performance of the organization.
Six corporate strategy
1.Emergency
2.Olympian
3.Acquisition - Driven
4.Market expantion.
5.Competency and culture-building based.
6.Performance control.
HATUR NUHUN