Description
Introduction
Corporate strategy is perhaps the most important strategy covered here, because it sets the metric by which all other strategies are formed within the company. For example, BMW has a focus on quality vehicles that they can sell for a premium. If a business unit of BMW decides to pursue a cost leadership strategy that will not work well with the overall firm strategy, it would be very difficult and could tarnish BMW’s brand image, although that is not to say that it is impossible.
The subject of corporate strategy is vast; however, corporate strategies are usually based around one central goal: growth. It is up to the management to determine the best way to achieve growth. Some firms may want to grow by diversifying. While a firm like GE, which has produced engines, financial products and entertainment programming, can diversify across industries, most diversify with closely-related industries. BMW also makes motorcycles and owns the Mini and Rolls-Royce brands, which cater to different markets than do BMW vehicles. Companies may create subsidiaries, different branches of a major company, in order to cater to these different markets.
This unit focuses on the various methods a firm can use to pursue growth. Growing is not just about buying the competition, because that is not always possible or expeditious. This unit will explore why that is the case and how to determine the best strategy for growth.
Reading Assignment
das Nair, R., & Mondliwa, P. (2017). Excessive pricing under the spotlight: What is a competitive price? In J. Klaaren, S. Roberts, & I. Valodia (Eds.), Competition Law and Economic Regulation in Southern Africa: Addressing Market Power in Southern Africa (pp. 97–119). Wits University Press https://doi.org/10.18772/22017070909.10. Retrieved from https://www.jstor.org/stable/10.18772/22017070909.10
Droege, S. B. (Ed.). (n.d.). Strategy levels. Reference for Business. https://www.referenceforbusiness.com/management/Sc-Str/Strategy-Levels.html
Kaleka, A., & Morgan, N. A. (2017). Which Competitive Advantage(s)? Competitive Advantage–Market Performance Relationships in International Markets. Journal of International Marketing, 25(4), 25–49. http://www.jstor.org/stable/44873823
Mitchell, R. C. (n.d.). Formulating strategy. In Strategic management. California State University, Northridge. http://www.csun.edu/~hfmgt001/writing.htm
“Formulating Strategy” is available as a Word document. You will need to search the page for the link to the Word file
Discussion Assignment
Review the material from California State University – Northridge’s Rex C. Mitchell’s “Formulating Strategy” and Reference for Business’s “Strategy Levels.” Then, go to the discussion forum for Unit 6 and engage in a dialogue with your classmates by answering the following questions:
1. What are the most commonly used corporate strategies? Provide an example of one of these strategies.
2. Analyze which strategies are best for creating long term value in the modern firm. Would your answer change if the organization was in an environment with a different pace of technological change?
3. How does a firm measure “long term value?” Consider factors beyond financial measures as well.
Your Discussion should be at least 250 words in length, but not more than 750 words. Use APA citations and references for the textbook and any other sources used.
You are expected to make at least three posts to the discussion forum during the course of the discussion period.
Written Assignment
Pick any corporation you are familiar with and identify one of the competitive tactics it uses from this week’s reading “Formulating Strategy.” Analyze the competitive tactic it uses. Consider its internal and external environment using any of the strategic management tools in the course (SWOT, PEST, 5 Forces). Synthesize (develop a new idea) for a competitive tactic it should attempt.
Prepare a two page (double-spaced) essay. The paper should be 12-point font, Times New Roman, be at least 500 words, and include a final source list.
Learning Journal
Students should document their activities, record problems they may have encountered and draft answers for Discussion Forums and Assignments. In addition, the student should consider the following questions for reflection: Consider “Some troublesome strategies to avoid or use with caution” from the reading for this unit. In your personal life, have you seen any examples of these? What might have been better strategies?
