How to Formulate a Corporate Strategy

Corporate strategy acts like a rudder on a ship, guiding companies toward their goals.
Corporate strategy acts like a rudder on a ship, guiding companies toward their goals. (Image: Jupiterimages/ Images)

Corporate strategies are thoroughly planned road maps of how to move forward as an organization. Strategies can be formed to address a wide range of issues, spanning all layers and departments in an organization. In forming a corporate strategy, executives often find it helpful to begin with grand strategic visions, then break the vision down into manageable goals and objectives at the department and work group level.

Set measurable, attainable and time-bound goals for where you would like your company to be in the future. Set grand and overarching goals for issues such as market share targets, market capitalization targets, stock prices and new customer acquisitions. Consider setting slightly subjective goals as well, including quality perceptions in the marketplace and customer service reputation. Examples of overarching, yet measurable, strategic goals include to secure 40 percent market share in your region in five years' time or to rank #1 or #2 on independent surveys for quality in the same amount of time.

Prioritize your goals. Determine which goals are likely to contribute the most to the company's profitability or sustainability, or which goals are the most time-sensitive. To continue the example given above, you may decide that having a flawless quality reputation in place, before reaching your market share goals, will help to ensure long-term success.

Generate possible alternatives for reaching your goals and break your overarching goals into department-level objectives. Be as specific as possible when setting realistic, measurable goals for individual departments. Ensure that departmental objectives directly and logically contribute to your grand strategic visions. For example, to secure a 40 percent market share in five years, you may set monthly, quarterly and yearly targets for sales growth for each of your outlets or sales teams, or you may set goals for the number of new outlets to be built each year. To reach the quality goal example, you may decide to institute a Total Quality Management system in your manufacturing department while setting a goal of reducing product defects by 10 percent each year.

Create monitoring and measurement systems to ensure that your strategies are on track and review your progress toward your strategic objectives regularly. Assign specific reporting procedures for each department you've assigned strategic objectives to and assign individual managers the responsibility of collecting and reporting on progress.

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