A corporate strategy is exceptionally important for each organization to have for a number of reasons. The first one is that drafting a corporate strategy helps the management to assess the environment the organization operates or plans to operate in, as well as its strong and weak points. Thus, the process of developing a strategy implies the company’s critical assessments, including potential opportunities, current challenges, and so on, which serves as the foundation for any future decisions. The business’ executives can implement a strategy that caters directly to the organization’s high-priority needs, which would allow it to succeed and compete adequately. According to Gamble et al. (2016), the launch of a strategy can help the company to improve its market position by incorporating both offensive and defensive mechanisms. As a result, a carefully crafted strategy provides the business with the opportunity to create change in the industry, revolutionize a whole sector, and reap the benefits of the first-mover approach (Hawkins, 2017). Apart from that, a corporate strategy enables the organization’s management to form well thought-out alliances and partnerships in order to reach bigger goals through productive collaboration.
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A corporate strategy is also extremely important when it comes to expanding to untapped foreign markets. Gamble et al. (2016) note that some of the strategic options an organization might have when entering international markets include export strategies, licensing strategies, franchising strategies, foreign subsidiary strategies, and alliance and joint venture strategies. Therefore, it is apparent that a great corporate strategy helps companies a lot in international operations, including cross-border coordination and the defense against established local companies or giant rich corporations instead. Moreover, a corporate strategy allows businesses to plan out their diversification activities, which, in turn, reduce volatility, expose the company to new opportunities, as well as assist in new customer acquisition. These are all indirect outcomes of adopting an effective corporate strategy, which makes it so crucial for each company to have.
Gamble, J., Thompson, A., Peteraf, M., & Strickland, A. J. (2016). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (20th ed.). McGraw-Hill Education.
Hawkins, A. J. (2017). How Tesla changed the auto industry forever. The Verge. Web.