Strategy Levels

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.
“Formulating Strategy” is available as a Word document. You will need to search the page for the link to the Word file.

PART 1:

Review the material from California State University – Northridge’s Rex C. Mitchell’s “Formulating Strategy” and Reference for Business’s “Strategy Levels.”

Please answer 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.

Please answer in 200 words or more. Use your own words – please do not copy and paste from a web site. Be sure to use in text citation and provide references for your sources. Wikipedia is not a source.