Corporate Strategy

In this session, we will explore the key concepts from the assigned reading, “Corporate Strategy,” to understand how organizations make decisions about their businesses and how they are managed at the corporate level. This content page provides a structured overview of the core ideas we will explore.

Core Concepts from “Corporate Strategy”

We will follow a linear sequence of higher-level ideas from the reading to build a comprehensive understanding of corporate strategy:

  1. Value Creation Through Portfolio Decisions: Understanding how to widen the wedge between customer willingness-to-pay and supplier opportunity cost by making strategic portfolio choices. This involves deciding:
    • What businesses the corporation should own.
    • What businesses the corporation should control.
    • What businesses the corporation should exit.
  2. Scope Decisions: Examining how the businesses within the corporate portfolio are related to one another. We will explore different types of scope decisions:
    • Backward integration
    • Forward integration
    • Horizontal diversification
  3. Mode of Entry Decision: Given the desired scope, determining the appropriate methods for entering new businesses or markets. We will consider various mode of entry decisions:
    • Alliance
    • Joint venture
    • Corporate venture capital
    • Non-controlling equity investments
    • Long-term market relationships
  4. Governance Decisions: Analyzing how business decisions are made within the corporate portfolio. We will discuss key aspects of governance:
    • Centralization vs. Decentralization: The degree to which decision-making authority is concentrated at the corporate headquarters versus distributed among business units.
    • Coordination vs. Autonomy: The balance between close collaboration and interdependence among business units versus the independence and freedom of business units to make their own decisions.
    • Role of Organizational Culture and Industry Contexts: The potential of unwritten rules and norms idiosyncratic to the organization and the industries make corporate strategy succeed or fail.

Recall Activity: Corporate Strategy

This activity is designed to help you refresh your memory and solidify your understanding of the key strategic management concepts introduced in the reading “Corporate Strategy”.

Visit the activity page and complete the activity with your group.

Simple Application Activity: Chinese EV maker Approach to Global Strategy

In this activity, you will apply the concepts we discuss to a real-world business scenario. We will analyze video-based content that describes corporate strategy decisions at Ford Motor Company. This will provide a practical context for understanding the nuances of corporate portfolio decisions.

Visit the activity page and complete the activity with your group.