Question

Assess potential corporate-level strategies for the organization

• What are the three corporate level strategies
• What are the benefits to using each of those strategies?
• What are the drawbacks to each strategy?
• Would each strategy (by type) be appropriate for your company? Why or why not?

Answer 1

Solution:

The three corporate-level strategies are listed as follows,

• Growth
• Stability
• Retrenchment

The benefits & drawbacks of these strategies are stated as follows,

• Growth:
  This strategy helps us in developing corporate-level strategies to help the business grow. The strategies are intended to grow the business to either other markets or through the introduction of new product lines. There are various ways in which an organization can implement its growth strategy. The drawback of this strategy is that it solely focuses on growth and may compromise on some of the crucial elements of business not clearly visible but extremely important for growth. Hence, this is the drawback and hence the focus should not be very concentrated at a particular point only.
  
• Stability:
  This is the strategy that is undertaken by the business when it is in the stability phase where the business is stable and is bringing the required revenue and cash flows into the business. Hence, the stability strategy is important because these strategies help the business become sustainable over the course of time. This can make the companies complacent and result in having a strong bias. This is the biggest drawback of this strategy. Nokia is a classic example of this.
  
• Retrenchment:
  This strategy is used to withdraw any operations that may be causing losses. Retrenchment is used to escape such losses and help ensure that business has minimal impact on this strategy. The disadvantage with retrenchment is that the retrenchment may not be favorable for the business and still be conducted suffering losses for the business. Hence, this is a drawback of this strategy.

Since our company is still very young the best strategy for our company would be the growth strategy because given the potential of the market there is tremendous scope for growth and hence the organization should also focus on the growth of the business. Hence, growth would be the best strategy.