Question

What is the corporate level strategy? Discuss the three generic choices of arenas at the corporate level. Pick one of these and discuss the economic logic behind it.

Answer 1

A corporate level strategy can be seen as the strategy which is formulated at the level of corporate between firms which are cooperating to accomplish some mutually shared goals. There are mainly three kinds of corporate level strategies which are given as diversifying alliances, synergistic, and franchises.

When the corporations have diversified alliances, then their resources and manpower are shared with each other which facilitated them to have diversification in product, services or location. This kind of strategy is quite helpful in creating and maintaining a competitive advantage within a specific market.

When a synergistic alliance is formulated by the corporations and resources are shared among them, the firms will be able to develop greater economies of scope and this will help them to have a greater competitive advantage in the market share. A desired level of synergy is created among the participating organization with the help of these alliances.

The franchising strategy is developed when the franchise contract terms are used by the firm to find out the different manners in which the resources can be utilized by the franchisees. If these strategies are undertaken successfully then the replication will help the franchisors to have the greater competitive advantage.