Corporate Strategy Notes
Subject Overview
Corporate Strategy covers the strategic management process and external environment analysis, industry and internal environment analysis with business-level strategies, corporate-level strategies (expansion, diversification, restructuring) and portfolio strategies, and strategy implementation and evaluation using the Balanced Scorecard. A 4-credit core theory paper.
Subject at a glance
4
Units
31
Topics
4
Credits
4
Infographics
Unit-wise Syllabus
4 units — open any unit for detailed topic-wise notes, diagrams and important exam questions
- Strategic management process
- strategic decision making
- levels of strategy
- McKinsey's 7-S model
- defining vision/mission/goals
- environmental scanning techniques (ETOP, PEST, SWOT, TOWS)
- Corporate level
Which businesses should we be in?
- Business level
How do we compete in each business?
- Functional level
How does each function support it?
Study guide
This unit covers the strategic management process, levels of strategy, the 7-S model, vision, mission and goals and scanning with ETOP, PEST, SWOT and TOWS. Run a SWOT and PEST on a real company.
- Porter's Five Forces
- strategic group mapping
- key success factors
- VRIO framework
- value chain analysis
- competitive advantage and core competency
- Porter's competitive strategies (cost leadership, differentiation, focus)
Value
Does it exploit an opportunity or neutralise a threat?
Competitive disadvantage
Rarity
Do few competitors have it?
Competitive parity
Imitability
Is it costly to imitate?
Temporary advantage
Organisation
Is the firm organised to use it?
Unused advantage; if yes, sustained advantage
Study guide
You study Porter's Five Forces, strategic groups, key success factors, VRIO, value chain, core competency and Porter's generic strategies. Use VRIO to judge whether a resource gives lasting advantage.
- Horizontal and vertical integration
- strategic outsourcing
- related and unrelated diversification
- international entry options
- corporate restructuring
- synergy
- mergers and acquisitions
- stability/harvesting/retrenchment strategies
- BCG matrix
- GE nine-cell matrix
- product life cycle matrix
Invest and grow
High industry attractiveness, strong business
Selective growth
High attractiveness, average strength
Selectivity
Medium attractiveness, average strength
Harvest or divest
Low attractiveness, weak business
Study guide
You study integration, outsourcing, diversification, international entry, restructuring, synergy, M&A, stability, harvesting, retrenchment, the BCG and GE matrices. Place a company's businesses on the BCG matrix.
- Strategy-structure fit
- resource allocation
- organization structure and systems
- leadership and corporate culture
- functional plans and their integration
- strategic and operational control
- the Balanced Scorecard
- 1
Fit structure to strategy
- 2
Allocate resources
- 3
Align culture and leadership
- 4
Set functional plans
- 5
Monitor with the balanced scorecard
- 6
Strategic and operational control
Study guide
You study strategy-structure fit, resource allocation, systems, leadership and culture, functional plans and strategic control with the balanced scorecard. Understand why execution fails more often than formulation.
Why Corporate Strategy Matters
Corporate strategy is the capstone of the MBA and the centre of consulting and leadership interviews.
How to Prepare for Corporate Strategy
- Analyse two or three real companies using each framework.
- Learn Porter's Five Forces and VRIO thoroughly.
- Read case studies from Indian and global firms.
Corporate Strategy: Frequently Asked Questions
What is VRIO?
VRIO tests whether a resource is Valuable, Rare, Costly to imitate and supported by the Organisation, which indicates sustained competitive advantage.