Question

(2) Discuss in details the different types of corporate strategies how you can relate this to Lebanon companies based on the severe economic situation (give examples for each) (350-400)

Answer 1

Business goals, current operations and corporate strategies are inseparable from the societies and environments within which they operate. Corporate level strategy addresses the entire strategic scope of the organisation. It is a “big picture” view of the organisation and includes deciding during which, product or service markets to compete and during which, geographic regions to work.

Corporate strategy is about strategic decisions about determining overall scope and direction of a organisation and the way in which its various business units work together to attain particular goals. Corporate-level strategy is an action taken to gain a competitive advantage through the selection and management of combination of businesses competing in several industries or product markets.

Some of the major corporate level strategies are as follows:-

• Stability Strategy:

When a company finds that it should continue in the existing business and is doing reasonably well in that business but no scope for significant growth, stability is the strategy to be adopted.

• Expansion Strategy:

Expansion strategy is usually considered as “entrepreneurial” strategy where firms develop and introduce new products and markets or penetrate markets to create share.

• Retrenchment Strategy:

Retrenchment strategy may require a firm to redefine its business and should involve divestment of a serious line , abandon some markets or reduce its functions.

• Combination Strategy:

When an organisation adopts a mix of stability, expansion and retrenchment either simultaneously for the purpose of improving its performance.

• Merger Strategy:

Economic implications of mergers and acquisitions have long been an interest to economics.

• Restructure Strategy:

Restructure strategy involves expansion or contraction of the portfolio or changes within the ownership pattern and control.

• Diversification Strategy:

Concentrating and sticking to one industry, investing huge amount in one industry is risky. It is just like putting all eggs in one basket.

Corporate business strategy aimed at increasing the sustainability of organisation. Some examples are:

• Cross-sell more products
• Grow sales from new products
• Product differentiation
• Pricing strategies

Lebanon's in today’s social environment, issues related to social responsibility and sustainability are gaining more importance, especially in the business sector. Business goals, current operations and corporate strategies are inseparable from the societies and environments within which they operate. Organisations have to account for the long-term impacts to support the sustainability of their businesses.