A vision statement outlines the goals a business hopes to accomplish in the long run typically in the range that ranges from five to 10 years, but som
A vision statement outlines the goals a business hopes to accomplish in the long run typically in the range that ranges from five to 10 years, but sometimes , even longer. It provides a picture of how the business is expected to be like in the near future and establishes a specific strategy for the creation and execution of corporate-level plans. Lets see Vision Statement Generator
What is the Corporate Strategy?
Corporate Strategy adopts an approach of portfolios to strategic decision-making by considering the entire business of a company to figure out how they can create the greatest value. To create a corporate strategy, businesses must consider how the different businesses they have how they affect each other and how the parent business is organized, so as to maximize the human capital, processes and the governance. Corporate Strategy is a part of business strategies which is focused on the strategic decision-making process for the business in question.
What are the components of Corporate Strategy?
There are a variety of important aspects of corporate strategy that the leaders of businesses are focused on. The most important tasks of corporate strategy include:
- Resource allocation
- Organizational design
- Portfolio management
- Strategic trade-offs
First Allocation Resources
Allocation of resource within an organization is mostly focused on two aspects which are capital and people. To increase its value to the whole company, the leaders have to decide the best way to distribute these resources among the different companies or business units in order so that the total is greater in value than its components.
The most important factors that affect the allocation of resources include:
- People
- Recognizing core competencies and making sure they are evenly distributed across the company
- Leaders should be moved to where they’re most needed and bring the greatest value (changes in time and based on the priorities)
- A sufficient amount of talented employees is available to all companies
- Capital
- The allocation of capital across different businesses to ensure that it will earn the best risk-adjusted yield
- Examining opportunities from outside (mergers as well as acquisitions) and distributing capital among the internal (projects) in addition to external potential
#2 Organizational Design
Designing for organizational structure involves making sure that your company has the proper organizational structure and processes in place to generate the most value. Things to be considered by leaders include the function that the headquarters of the company plays (centralized approach vs decentralized) as well as the reporting structure of business units and individuals such as vertical structure, matrix reporting, and so on.
Important aspects that influence organizational design include:
- Office head (centralized in contrast to decentralized)
- Determining how much discretion to grant business units
- The decision-making process involves deciding whether the decisions are made either bottom-up or top-down
- Influence on the business strategy units
- Structure of organization (reporting)
- Determine how big projects and commitments will be split into smaller ones
- Integrating business units and functions to ensure that there are no redundant tasks
- allowing the right balance between risk and return to be maintained by separating responsibility
- The creation of centers of excellence
- Deciding on the proper delegate of authority
- Establishing Governance structures
- Establishing reporting structures (military top-down / matrix reporting)
#3 Portfolio Management
Portfolio management examines how the business units complement each other in their interactions, as well as the way they interact and determines the areas in which the company can “play” (i.e. which businesses it is likely to or not).
Corporate Strategy relating to portfolio management include:
- Choosing what industry to join or leave
- In determining the degree of vertical integration, the firm must be able to
- Diversifying risk in order to reduce the correlation between business results
- The creation of strategic alternatives through seeding new opportunities which can be heavily invested in the event of a need.
- Examining the landscape of competition and making sure that the portfolio is balanced with respect to the developments in the market
The most important elements of a good Vision Statement
Although companies shouldn’t be overly ambitious in setting their long-term objectives however, it is essential to define a higher and further goal in the form of a vision statement that outlines the company’s goals and inspires the public. Here are the key components of a successful vision statement:
- Forward-looking
- Inspirational and motivating
- A reflection of the company’s values and culture
- With the intention of bringing advantages and enhancements to the business in the near future
- The company’s purpose for existence, and the direction it is headed
Example
Let’s take a look through The Microsoft Corp.’s Vision Statement. Microsoft Corp. is an American multinational corporation that develops and manufactures, licenses and sells technology products which include computer software, electronics as well as personal computers. It is also among the largest corporations in world, along with corporations like Apple, Inc. and Amazon.com, Inc.
Microsoft’s vision is forward-looking, as achieving an increase in growth and impact to any community could require an entire lifetime or more to attain. It also conveys the idea of bringing about improvement in living conditions all over the globe, which represent Microsoft’s values of creativity inclusiveness, diversity Corporate social responsibility and the environment.
The Development of the Purpose Statement
The vision statement, mission statement and values are typically the three most commonly used definitions of a business, which explain the reason why a business exists. In recent times, a different type of statement has become popular in the world of business and is growing in popularity. This kind of statement is known as”the Purpose Statement.
A Purpose Statement explains the purpose of a business in the same way that the vision and mission statements do, however it highlights the relationship between the brand’s identity and corporate culture. It blends the elements of a mission, values, and vision into one single statement.
More Resources
To find out more about strategy, take a look at the Corporate & Business Strategy course that covers all the important terms and theories of strategy, and illustrates the entire strategy analysis procedure.
Other pertinent CFI sources include:
- Strategic Analysis
- Mission Statement
- SWOT Analysis
- All Strategy Resources
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