Corporate-Level Strategies

A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources. In choosing a corporate-level strategy, managers ask, "How should the growth and development of our company be managed to increase its ability to create value for customers (and thus increase its performance and make money) over the long run?" Managers of effective organizations actively seek new opportunities to use a company's resources to create new and improved goods and services.

The principal corporate-level strategies that managers use to help a company grow and keep it at the top of its industry, or to help it retrench and reorganize to stop its decline, are (1) concentration on a single industry, (2) vertical integration, (3) diversification, and (4) international expansion. An organization will benefit from pursuing any of these strategies only when the strategy helps further increase the value of the organization's goods and services so more customers buy them. This exercise will give you the opportunity to choose among these strategies by recognizing the situations in which each is most appropriate.

Roll over each company name to read a description and decide which type of strategy they use. Then, drag the company name to the appropriate place on the chart.

Concentration in a single industry

Forward vertical integration

Backward vertical integration

Related diversification

Unrelated diversification

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CAMPBELL sold Godiva chocolate and invested the money in its core soups business.

APPLE opened stores to sell the computers and other electronic devices it makes.

GALLO WINES opened a new divisions to make the bottles it would use for the wines it produces.

NIKE reinvest profit into its sportswear product development.

COCA COLA buys a company that makes artificial sweeteners that it iwll use to produce its sugar free beverages.

KRAFT FOODS aquires a toy manufacturing company

MCDONALDS buy chicken ranches to provide egss to its restaurants.

GENERAL ELETRONICS purchases a plumbing supply manufacturing company.

REDKENS manufacture shampoo, rinse, and other hair product. it buys a company that manufactures blow dryers, curling irons, and flat irons.

EGG WAFFLES buy a syrup-producing company to increase its market share in the breakfast food industry.