Corporate Strategy: Analysis, Choice and Implementation
Corporate Strategy tests analysis, choice and implementation: how organisations create sustainable advantage in dynamic environments.
Core concepts
- External analysis: PESTLE and Porter's five forces (rivalry, new entrants, substitutes, buyer power, supplier power).
- Internal analysis: resources and competences, VRIO, value chain, SWOT linked to strategy.
- Strategy levels: corporate (portfolio, diversification), business (cost leadership, differentiation, focus), functional.
- Growth options: Ansoff matrix (market penetration, product development, market development, diversification).
- Portfolio tools: BCG matrix uses market growth and relative market share; GE-McKinsey uses attractiveness and competitive strength.
- Implementation: structure, culture, systems, stakeholder alignment and balanced scorecard.
Worked example
A conglomerate has four SBUs. A: market growth 12%, relative share 1.5; B: growth 3%, share 1.8; C: growth 15%, share 0.4; D: growth 1%, share 0.3. Under BCG, A is a star (invest selectively), B a cash cow (harvest to fund others), C a question mark (build or exit after analysis), D a dog (divest or rationalise). The recommendation is not automatic: check synergies, cash needs and competitive capability before divesting D.
Traps
Calling a high-growth, low-share business a star; using absolute market share instead of relative share; presenting SWOT as a list without strategic implications; treating five forces as only competitor analysis; and recommending diversification without assessing relatedness and execution risk.