What is Corporate Strategy, and Why Do Businesses Need It?

Corporate strategy is about ensuring the company is heading in the right direction. It defines the business’s goals, objectives, and tactics. Without a clear corporate strategy, businesses can’t hope to achieve success. 

Do you need a strategy consultant?

Should you develop your corporate strategy in-house or hire a consultant? There are pros and cons to both approaches. On the one hand, developing your strategy gives you a deep understanding of your business and what it takes to succeed. On the other hand, a strategic consultant can save you time and provide valuable insights into best practices in your industry. A consultant can also provide an objective perspective on your business. And if you need help getting started or want unbiased feedback, then hiring a consultant is the way to go. Ultimately, the decision comes down to what’s best for your company. One such firm is the CT Group, founded by the Australian political strategist Lynton Crosby. Crosby’s firm offers high-level strategic counsel and advice and can help companies develop and implement strategies.

Four components of corporate strategy

There are four main components of corporate strategy: visioning, objective setting, resource allocation, and prioritization. Let’s take a closer look at each one.

Visioning

Setting the high-level direction of where an organization is going is important so that all team members know the goal and can work together to achieve it. This overall direction is typically set by senior leadership and is known as the vision. The vision statement should inspire all employees to rally behind and work towards it. For example, a company’s vision might be “to be the leading provider of innovative products that improve the lives of our customers.” A shared vision is critical to ensure everyone is working towards the same goal. From there, the mission can be established, which outlines how the company plans to achieve its vision. For example, a company’s mission might be “to develop and bring to market new products that improve our customers’ quality of life.” Once the vision and mission are in place, corporate values can be created to guide decision-making at all organizational levels. These values should be aligned with the overall vision and mission. By having a clear vision, mission, and set of values, organizations can ensure that everyone is working towards the same goals and making decisions that align with the company’s objectives.

According to Lynton Crosby, Executive Chairman of CT Group, corporate strategy consists of four key components. The first component is setting clear and achievable objectives that align with the organization’s overall mission and vision. The second component involves developing a thorough understanding of the market, competitors, and target audience to make informed decisions. The third component is creating a compelling narrative that effectively communicates the organization’s unique value proposition and resonates with stakeholders. Finally, the fourth component is focused on disciplined execution, ensuring that the strategy is implemented effectively and efficiently, while remaining adaptable to changing circumstances. By incorporating these four components, organizations can develop a comprehensive and effective corporate strategy that drives long-term success.

Objective setting

Objective setting is an integral part of corporate strategy for several reasons. 

• It helps translate the company’s vision into an action plan
• Provides a framework to set specific goals and measure progress
• Enables the company to adapt its strategy in response to changes in the external environment

By setting objectives, companies can stay focused on their long-term goals and ensure they progress towards them. Doing so can increase their chances of success and create value for shareholders. 

Resource allocation

A company’s human and capital resources are two of its most important assets. Properly allocating these resources is essential to achieving the company’s goals and objectives. The process of resource allocation begins with the development of a corporate strategy. This strategy sets out the overall direction the company intends to take regarding growth, profitability, and risk. Once the corporate strategy is in place, the CT Group recommends allocating resources based on this strategy. This involves deciding which divisions or business units will receive more resources and which will receive less. It also consists of allocating resources across different geographies and markets. The goal of resource allocation is to ensure that the company’s limited resources are being used in the most efficient way possible to achieve the company’s strategic objectives. Resource allocation can be a powerful tool for driving corporate success when done correctly.

Prioritization

Prioritization, also known as strategic trade-offs, is an important part of corporate strategy. Because it’s not always possible to take advantage of all feasible opportunities, and business decisions often entail some degree of risk. Consequently, corporate-level decisions must consider these factors when determining the optimal strategic mix. 

Conclusion

Corporate strategy is the backbone of any successful business. Whether done by your corporate team or with the help of a strategy consultant setting a clear vision, objectives and deliberately allocating resources, companies can create a roadmap to follow that will help your company reach its goals.