Every organization has its plan on how to execute different operations for achieving the set goals. Corporate strategy shows how to implement these activities and the expected results for the organization. Some of the activities have little impact on the overall performance of an organization and therefore the management takes an option of outsourcing them from the external markets. The company gives core businesses the first priority because they are the source of revenue for the company and better strategies taken towards their success.
Corporate Strategy, Outsourcing and Core Business Focusing
Corporate strategy
Corporate strategy shows the patterns of an organization which portray the missions, goals, policies, and guiding principles which outline how to achieve various plans and the type of business category to pursue. The strategy also gives the plan on the type of economic organization it intends to be in and the different plans for the members, employees, customers, and shareholders of the company. Corporate strategy applies to the whole organization in contrast with the business strategy which only concerns with the specific product which is on demand at a particular time. Corporate strategy enables superior performance of an organization through tough competition with others in the same field while focusing on the resources to achieve high returns at the end. Since it involves a process, the organization formulation and implementation are the aspects in analyzing the strategy. The senior executives who include the managers, the directors, and the chairpersons are responsible for the implementation of the organization’s corporate strategy (Foss, 2003).
How external turbulence encourages outsourcing
Many companies ...
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...ce efficiency (Mahadevan, 2010). As such, outsourcing is a good corporate strategy in the current business world.
References List
Dalal, J. (2011). Outsourcing in the Age of turbulence. International Association of Outsourcing
Professionals (IAOP): Global Business magazine. Retrieved from:
http://www.iaop.org/PrintContent.aspx?CTX=2&AID=3192&SID=34&SSID=175
Foss, J. N. Resources, Firms, and strategies: A Reader in the Resource-Based Perspective. Cape Town: oxford University Press. pp 54-55
Huber, B. (2011). The Great Procurement Outsourcing Debate: Important or Core Business
function. Technology Partners International, Inc. Retrieved from:
http://www.tpi.net/pdf/pointofview/POV-The-Great-Procurement-Outsourcing-
Debate.pdf
Mahedevan, B. (201). Operations Management: Theory and Practice. South Asia: Dorling Kindersley (India) PVT. Ltd. p 49
One the other hand, corporate strategies consider about the selection of direction for a company as a whole and the management of its business or
a. Basically, corporation strategy demonstrates a corporation’s overall direction in the light of its general mindset toward growth and the management of its businesses and product portfolios. There are three crucial categories, which are stability, growth, and retrenchment, that involve within corporation strategy. Additionally, business strategy often occurs at the business unit or product level, and it highlights the improvement of the competitive position of a company’s products and service in the particular market segment served by the business unit. Competitive and cooperative strategies are two main categories that match within business strategy. Furthermore, functional strategy is the method that through a functional area to
|To examine a wide range of business strategy topics involving strategy formulation, including market structure, competitive |
In organization of any type, management should plan its long-term future. Corporate strategy is a management plan, which defines its business activities, prospects and development objectives. It also includes organization’s business strategy as a main choice of means and methods of competition (Griffin, & Pustay, 2005). This may be production of standardized products or delivery-on-order products/service, competition based on lower prices or rapid delivery of products. Corporate strategy provides overall direction, which provides the framework to perform functions throughout the organization.
A company’s strategy is actually the plan through which the company aims at its growth, at gaining market shares, customers and its position in the market. Furthermore, the specification of a company’s strategy leads the company through being successful and competitive to achieve its objectives. The business model of a company determines if the followed strategy makes sense and if it leads to profits, which is the main objective of business activities. The difference between a company’s business model and a company’s strategy is their scale of focus. From the one hand strategy relates to the general directions and approaches that a company follows
According to Johnson et al (2013) and John (1997), strategy can be defined as a general scope or long-term direction of a firm. Johnson et al (2013) state that strategy has three levels which refer to corporate, business and operational levels. In Lynch’s view (2006), there are two elements in corporate strategy that are corporate-level and business-level. This essay will focus on both corporate and business-level strategy. To conclude Lynch (2006) and Johnson et al (2013)’s points, corporate-level strategy can be identified as a purpose or overall scope of an organization. Business-level strategy is related provide the best value for products or services to compete in the specific markets. For example, innovation or response to competitors are usually the tactics of business-level strategy (Johnson et al.,
All firms are faced with the need to make strategic decisions that determine which business activities will be performed internally, and which activities should be outsourced. Outsourcing has become an increasingly favourable way of executing business operations due to advancing technology and reductions in transportation costs. Nowadays the majority of firms tend to employ a mixture of both business models as it has become strategically advantageous to conduct some activities in-house and other activities externally. The Transaction Cost Economic Theory literature dates back to works began with Coase (1937) and his Transaction Cost Economic Theory (TCE) of the firm. Coase(1937) states that a this is also known as a ‘hybrid strategy’ Three
A successful business strategy will identify changes in the external trends in the market place. Plan out what the company’s future direction is. Set out the goals for the management team. It will identify a vision of where the company wants to be in the future. Keep all employees informed of the direction of the company.
All assets, capabilities, organizational processes, firm attributes, etc which are controlled by firms, can be used to implement strategies more efficiently and effectively. These firm resources can be classified into three important categories: Physical Capital- e.g. technologies, infrastructures; Human Capital- e.g. training, experience, worker and manager skills; and Organizational capital- e.g. a firm’s formal reporting structure, formal and informal planning, etc. These resources can be helpful in specific conditions , thereby enabling a...
The corporate level strategy basically lays down the foundation as regards where the organization is today and what expand, growth function a company has and what could be possible unit that can a corporate exit.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources. Capabilities describe environment and strategic environment. Core competencies include knowledge and technical capability. In this section we will attempt to describe in detail the three segments which are resources, capabilities, and core competencies.
Numerous definitions of strategy exist, in most circumstances strategy can loosely be explained as an overall plan of deployment of resources to ascertain a favourable position within a market (Zablah, Bellenger and Johnston 2004; Grant 1994, p 14). Further, imbedded in many successful organisations are strategies, the importance of which is to remain relevant in the market, and successful in the various attributes of business; profiteering, employee motivation, maintaining sustainable core competencies, effectiveness in operation, or efficiency in the conduction of operations. Therefore challenges involved in the formulation and implementation of a strategy can revolve around the overall external market, as well as internal
Outsourcing has been around for many years. In this paper I will discuss some of the history of outsourcing, the goods things about outsourcing, and the bad things about outsourcing.
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).