Guide to Corporate Strategy: Analysis and Real-World Examples

Discover a very useful guide to the a company's strategy: Analysis, real-world cases, and lessons from Porter.

Companies need a sufficiently robust cost and financial structure to stand out from the competition and dominate the most important links in the value chain, which is possible through operational efficiency and strategy.

What are the different types of business strategies?

Understand and apply appropriate methodologies and techniques, with precise plans and outlines in the various areas, is the key to developing a proper business strategy, to ensure the company's optimal development, make it attractive to customers, and establish its position in the market.

In order to build a sustainable competitive advantage and achieve the desired strategic position, there are various Types of Business Strategies:

1. Corporate Strategy (Corporate Image)

Set medium- and long-term goals to facilitate the Defining a brand identity or personality and the company's reach in its target market.

A sound business strategy enables a company to:

• • Determine which types of actions are most profitable.

  • Have a thorough understanding of and maintain an interest in the market in which a company operates.

  • Analyze what products should be like in order to meet the needs of the target customer group.

What types of corporate strategies are there?

1. 1. 1. Stability Strategy: It allows the company to maintain its current status, performance, and profitability.

      2. Growth Strategy: continue to grow its brand value and market presence, or enter a new market.

      3. Contraction strategy: It is an option for reducing the number of SKUs or selecting the most profitable segments.

Examples of Corporate Strategies

• • • Growth Strategies: for increase sales and the company's profits. Various strategies are employed, such as diversification, international expansion, and partnerships, among others. One example is the Málaga-based company Primor; it began as a perfume shop in Málaga and, over the years, has expanded to include stores throughout Spain.

    • Contraction model: Increase profits by eliminating unprofitable areas in a specific situation facing the company. Take the case of Xiaomi in Seville: they had a store in Nervión Plaza and decided to close it because it was unprofitable, while continuing to provide the service. online, which works very well.

    • Combination: use different corporate strategies to grow and maintain a strong market position. One example is Inditex, which opens and closes stores in different cities and has continued to grow. Examples of this include the brand’s various stores operating under the model of flagship stores or flagship stores located in downtown or tourist areas, turning them into iconic landmarks of the city, as shown in images compiled by the renowned digital media outlet.

2. Business or Competitive Strategy (Product and Marketing)

It focuses on aspects related to the the company's marketing strategy, analyzes competing companies and the potential demand for the service or product, and includes: company mission or purpose, related to meeting customers' actual needs, vision for the future that leads to the fulfillment of the mission and values that highlight the Company Strengths.

The competitive strategy It also defines important elements:

Examples of Competitive Strategies

• • • Low-cost company: It consists of offering the cheapest products on the market. Examples of this include Tea Club and Helados Fruna, both of which produce large quantities of products, taking advantage of economies of scale to reduce costs and achieve success.

    • Business Differentiation: Design and sell products that customers consider unique, so they are willing to pay more for them. Some examples include San Francisco Ice Cream and Montblanc Pens, which have added special features to their products, allowing them to charge much higher prices—and they do so successfully.

    • Product Leadership: It involves designing products for a segment of customers with specific tastes, taking their needs into account. The company Apple from smartphones, tablets And from its very beginnings, the company has been selling a lifestyle—not just technology.

3. Functional or Cooperative Strategy (Resource Optimization)

It is responsible for establishing the Organizational Chart of the Company, to improve product quality and maintain customer satisfaction. It is focused on the implementation of internal company actions, related to marketing, human resources, and technology.

Examples of functional strategies

One of the objectives of Coca-Cola's functional strategy is maximize profits, which it achieves by ensuring that the company identifies and adequately responds to the needs of consumers in the market. 

On the other hand, one of Grupo Bimbo's business strategies is based on being a sustainable company, highly productive and fully human.

Lessons to Consider from Porter Regarding a Company's Strategy

Some of the key lessons from Michael Porter, considered the father of the modern business strategy and which will surely be very useful to you; we can summarize them as follows:

• The essence of strategy is to define what you don't want to do.

• There is no such thing as a perfect strategy—only one that is appropriate and tailored to you.
• The main goal should be profitability.
• The strategy must be consistent.
• Competition is wonderful; we need to preserve it.

Source: emprendeaconciencia

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