ARTICLE 12: IMPORTANCE OF

CORPORATE LEVEL STRATEGY

Summarized by: Zubair Ahmed Memon

Link: https://bizfluent.com/info-7959300-corporate-strategy-important.html
Author: Billie Nordmeyer
Publish date: September 26, 2017

Submitted to:
Sir Adnan Kehar

OCTOBER 6, 2018
SUKKUR IBA UNIVERSITY
What is the importance of Corporate Level Strategy?
Aim of corporate level strategy is to determine what goals and objectives company want to achieve
and how it utilizes different procedures and the means for it to do so. In other words, a corporate
level strategy determines the viability of an organizations activities and the manner in which a
firm’s business processes are integrated to achieve the organization’s goals.
The success of a corporate level strategy is attached with the degree to which company resources
are being utilized in effective way, establish the goals it want to achieve and enhance a company’s
position, as well as increasing the value of the sum (wealth maximization) beyond the value of its
tangible assets. These are discussed further.
Allocation of Resources
A corporate level strategy is a tool a company uses for gaining the optimum benefit from the
allocation of its resources by investing them in best investment opportunities.
During strategic planning processes, a company assesses the performance of each business unit.
And based on the results, the company will make investment in and divests assets to reorganize it
resource allocations. Managers allocate company resources according to the desirability of each
business unit’s market opportunities, which determines its planning priorities.
Establishing Expectations
A company communicates its corporate level strategy to individual business units in order to drive
performance and establish the expectations of stakeholders. Corporate objectives focus on
important areas, such as market position, productivity and profitability, objectives that can be
measured, such as achieving market share, return on investments or return on equity. These
expectations guide and direct all stakeholders to put an effort towards achieving established
strategic goals and objectives of company.
Improves Competitive Position
The corporate level strategy is concerned with an organization’s growth and value maximization.
Consequently, the strategy decides the businesses in which a company competes and how the
business units structure and manage their activities to improve a company’s competitive position.
Increases Shareholders Value
Based on a corporate level strategy, business units can maximize wealth of investors beyond
tangible and intellectual assets. By making strategic choices about the business a company plans
to utilize its resources and capabilities to build core competencies and then transform their core
competency to competitive advantages, as the company gains multiple competitive advantages the
probability of success in maximizing company’s value also increases.