CORPORATE STRATEGY is the direction an organization takes with the objective of achieving business success in the long term.

Recent approaches have focused on the need for companies to adapt to and anticipate changes in the business environment, i.e. a flexible strategy. The development of a corporate strategy involves establishing the purpose and scope of the organization's activities and the nature of the business it is in, taking the environment in which it operates, its position in the marketplace, and the competition it faces into consideration thus Corporate strategy is the selection and development of the markets(or industries)in which a firm seeks to compete in however Business level strategies(low cost, differentiation, and focus) are HOW a firm competes in a single market or industry. Approach Corporate strategy is concerned with reach, competitive contact, managing activities and interrelationships and management practices, Reach means identifying issues that are corporate issues such as deciding which types of businesses the corporation should involve itself with and deciding how the business will be combined and overseen. Competitive contact means deciding where the focus areas for competition are within the corporation. Managing activities and interrelationships involves developing financial and personal relationships with other business units so the firm may have a good rapport with those other businesses. Managing activities involves deciding on a centralized, direct, leadership or decentralized, indirect, leadership that relies on outsides influence, persuasion and rewards, Types Strategy Formulation is a strategic planning or long rangeplanning. This processis primarily analytical, not action oriented. This process involves scanningexternal and internal environmental factors, analysis of the strategic factors and generation, evaluation and selection of the best alternative strategy appropriate to the analysis.Identification of various alternative strategies is an important aspect ofstrategic management as it provides the alternatives which can be considered andselected for

implementation in order to arrive at certain result. At this stage,the managers are able to complete their environmental analysis and appraisal oftheir strengths and they are in a position to identify what alternativesstrategies are available for them in the light of their organizational mission.In this there are four main strategies:1) Stability strategy(for example. concentration)2) Growth/Expansion Strategyinternal growth (innovation, R&D, market development), external acquisitive growth (vertical and horizontal acquisition, diversification, joint ventures)3) Retrenchment strategy(turn-around, divestiture and liquidation)4) Combination strategy However, any one of the strategies could serve as the basis for achieving the major long-term objectives of a single firm, and that firms involved in multiple industries might combine several grand strategies. Each grand strategy has an internal or external orientation; strategies marked [i] are internal orientated where resources are redirected within the firm, and strategies marked [e] are external orientated. http://www.scribd.com/doc/12538640/Grand-Strategy

Pearce, Robbins, and Robinson (1987) define a grand strategy as a comprehensive general plan of major actions through which a firm intends to achieve its long-term objectives and contend that this is supported by a coordinated and sustained strategic management efforts.

Grand strategies tend to be associated with a top down management style, which underpin sustained efforts directed toward achieving long -term business objectives GRAND Strategic OPtions: Existing products/existing markets Market Penetration Is growth-oriented Consolidation Is defense-orientnted 1. General Growth--increasing the size of the organization to realize economies of scale, enlarge the organization's marketplace, build operating surpluses or for some other expansion related reason. 2. Concentrated Growth--choosing to focus on and upgrade or increase the market penetration of a limited number of successful products or services that have been mainstays of the organization. 3. Market Development--choosing to add new customers in related markets this means adding New segments, New users andNew geographies. 4 Product/Service Development--choosing to create new, but related products or services that can be sold to the organization's existing primary markets. Product development is essentially the opposite of market development. While market development focuses on exploitation, product development focuses on exploration. This involves investing heavily in research and development in order to create new and innovative product offerings. For example, a car manufacture may develop safer or more fuel-efficient cars through investments in research. These advances give firms an advantage over the competition. 5.Innovation/Differentiation Leadership--choosing to create products or services that are perceived in the marketplace to be so new, so

different or so superior (often by applying cutting-edge information technology) that they expand performance boundaries and make existing products or services obsolete. 6.Diversification:choosing to move into new areas of focus or spheres of activity to utilize the organization's existing resources, as the organization's primary markets mature or decline. This involves Related vs unrelated diversification or conglomerate diversification a)Concentric Diversification involves choosing to acquire or merge with other organizations that are compatible with or reinforce the organization's technology, markets, products or services. b). Conglomerate Diversification involves acquiring a portfolio of businesses based on financial performance criteria.Product-market synergies are not an issue. eg :Microsoft and the Xbox and Zune Apple with the iPod, and iPhone c) Compensating Diversification--choosing to acquire or merge with another entity that counterbalances the organization's own strengths and weaknesses. 7. Integration--choosing to consolidate major systems or processes, usually through mergers or acquisitions. a). Horizontal Integration--choosing to acquire or merge with a similar organization in order to reduce competition. This strategy will usually increase a firm's market share and it help the firm gain relevant knowledge and expertise. Horizontal integration strategy can support a concentrated growth or market development strategy. b). Vertical Integration--choosing to develop an internal supply network that puts the organization closer to its producers or providers (backward integration), or to develop an internal distribution system that puts the organization closer to its end users (forward integration). 8)Strategic Alliance--choosing to develop teams, partnerships, joint ventures, networking, shared services or cooperative programs with suppliers, customers or other compatible enterprises, in order to develop new products, markets, services or efficiencies.

9)Retrenchment--choosing to turn around or reverse the negative trends in operating surpluses, primarily through a variety of costcutting methods. 10)Turnaround is used when firms are struggling financially. The strategy usually involves cost reduction and asset reduction. Assets are also often sold to free up cash for new initiatives. In order to turn a firm around, managers will often change the direction of the firm. Once costs are reduced and assets have been sold to generate cash a positive growth or diversification strategy must be implemented to complete the turnaround.For example, a print newspaper might make the switch to online publication in order to adapt to the changing market. urnaround is used when firms are struggling financially. 11)Downsizing--choosing to reduce the scope or scale of products and services to fit financial or other constraints. 12)Divestiture- Divestiture is a strategic action that involves selling a major component of a firm or the entire firm. The entity is sold as an ongoing business. 13) Liquidation--choosing to go out of business if the organization is no longer viable or if its mission has been fulfilled, usually by selling off the organization for its tangible assets and closing it down. Liquidation is the grand strategy of last resort. When a firm cannot successfully turn itself around and there are no interested buyers, there is no choice but to liquidate the firm. Liquidating the firm involves selling off all its assets, including physical assets such as factories and merchandise, as well as intellectual assets, like brands and patents. The goal of a liquidation strategy is to recoup as much money for the ownership as possible, before shuttering the business. 14. Piggybacking--choosing to offset declining revenue or income in one or more areas of focus or spheres of activity, or to subsidize one

or more particularly desirable spheresof activity, with income earned in other sphere(s) of activity. 15. Focus/Specialization--choosing to limit and focus the organization's activities, often by withdrawing from certain areas of focus or spheres of activity, so that it only does what it can do well within a particular arena or niche, typically by aiming at a particular customer group, segment of the product or service line, or geographic market. 16 I17. Operational Excellence--choosing cost-and-convenience leadership by attempting to produce the lowest cost and most readily accessible products or services, often through an emphasis on strategic or competitive sourcing. 18. Customer Intimacy--choosing through the cultivation of relationships to develop and maintain unparalleled knowledge and understanding of the current, emerging and prospective needs of the clients, customers, industries or markets served by the organization. 19. 20. Financial Independence--striving for diversification of the organization's funding sources as a way of gaining control over its fiscal environment. 21. Legal Independence--striving to avoid or end being owned or constrained by, or being part of, another organization in order to achieve, increase or preserve operating autonomy, freedom of action and visibility. 22. 23. 26.

11. Quality Improvement--choosing to improve the organization's status, capacity, resources and influence by continuously upgrading its existing products, services and internal operating capabilities.

concentric diversificationn 1)Amazon to Acquire Goodreads

By Zacks Equity Research | Zacks 6 hours ago Amazon.com Inc. (AMZN) has announced that it will acquire Goodreads, a book recommendation site that helps its readers to find and share books of their choice, for an undisclosed sum. Launched in Jan 2007 by Otis Chandler and Elizabeth Chandler, Goodreads allows users to freely search for books and other reading materials. It allows users to add books to their shelves and also write reviews. It enjoys a steady following on social networking sites such as Twitter, Pinterest, Facebook and others. Currently, it has 16 million members with 525 million books added to their shelves and 23 million reviews written to date (as mentioned on the website). Goodreads brings a platform that will help Amazon understand what readers like to read, which could further help its bookselling business. The acquisition will not only reduce competition for Amazon but also diversify and expand its international base. The coming together of these two entities will provide both authors and readers a broader platform. Amazon, on its part, can extend the Goodreads experience to millions of readers through its Kindle platform. As per a report by IDC, Apple is leading the tablet market with 43.6% market share followed by Samsung at 15.1%. Amazons Kindle Fire still remains far behind at 11.5%. However, unlike the other players, Amazon is primarily a retailer, so its focus is more on selling goods. Therefore, the importance of its Kindle tablet is as a platform for these sales. In this respect, it is worth noting that Amazon does have a Kindle app to sell books on hardware produced by others. If the app offers more, it could retain its position as the leading book seller. Amazon is one of the leading players in the extremely fastgrowing retail e-commerce market. Of course, competition from eBay Inc. (EBAY), Apple Inc (AAPL) and Barnes & Noble, Inc.(BKS) remains as strong as ever. While the strong growth prospects are making the market more competitive by the day,

Amazon continues to maintain and even grow its share on the back of its consistent and reliable service. Amazons scale of offerings, its broad reach and platform approach are the keys to its success. In the fourth quarter of fiscal 2012, Amazon reported revenues of $21.3 billion, up 54.0% sequentially and 22.0% from the yearago quarter. This was within the guidance of $20.322.8 billion (up 55.7% sequentially and 23.3% year over year at the midpoint), although short of our expectations. Year-over-year revenue growth was 23% excluding unfavorable currency impact. Amazon has a Zacks Rank #3 (Hold). -The strategy followed by Amazon is concentric diversification Concentric Diversification basically involves choosing to acquire or merge with other organizations that are compatible with or reinforce the organization's technology, markets, products or services. By buying goodreads,a book recommendation site which will basically give Amazon a platform to understand what readers like to read, which could further help its book-selling business, also create market for selling its ebooks for its product Amazon kindle. Amazon, on its part, can extend the Goodreads experience to millions of readers through its Kindle platform. with Goodreads strong customer base of 16 million members with 525 million books added to their shelves and 23 million reviews written to date (as mentioned on the website),The acquisition will not only reduce competition for Amazon but also diversify and expand its international base with rapidly evolving markets and technology especially in the case of internet retailing and ecommerce markets .this will help Amazon maintain its market share and continue the strong growth figures through its large scale of offering along with focusing on its reliability and consistency in services

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