Marketing - Integrated Nature of Developing a Corporate Strategy - Essay Example

? Business Strategy Business Strategy Introduction Business strategy is the most important aspect ofany successful business. It is a generic term that is defined by different expert in different ways. Business strategy can be best defined as the means or ways that a business has to adopt in order to achieve the overall organizational goals and objectives which in turn lead to greater success and profitability (Dubey, 2009; Kourdi, 2009). This report is aimed at understanding the integrated nature of developing a corporate strategy and also describes the four key dimensions of well-developed business strategies. Volkswagen group is taken as an example to support the analysis. Integrated Nature of Developing a Corporate Strategy Corporate strategy integrates all other strategies of an organization or a firm. The main purpose of corporate strategy is to find ways to optimize the current business portfolios of a firm and how this can be changed to meet the stakeholder’s changing interests (Sudi,2003). An organization or a firm will have numerous business and operations ranging from a single industry to multiple industries. Hence, the corporate strategy can not be developed without integrating the various business strategies of a firm. Overall objectives and aims of an organization are formulated based on the overall functions and operations of an organization. Any corporate strategy that is developed without taking into account the various operations or businesses will fail to achieve the overall organizational objectives and aims. Also the goals and objectives of an organization must not be isolated but must be designed in a manner to achieve the vision of the organization, and must be interrelated. The corporate strategy is aimed at achieving this vision (Gallagher, 2010). Four key dimensions Asking the right question would determine the dimension of a well –developed business strategy. The four main dimensions are why, what, who and how. The answers to these would explain whether the business is flourishing or not and how well the organization is doing. (McCabe, 2010) Why? The question of why, is directed towards customer satisfaction by assessing,’ why the customer would like the product or service?’, and also the outcome expected from them. This key dimension determines the role of an organization in the market, the type and kind of products that they must put out or the type of service that is intended to be provided to the customers. What? To achieve a pre-dedicated objective and aim, what are the measures that must be undertaken must be seriously focused for the final goal achievement. This must include intervention from all aspects of the business and must involve the inclusion of role of newer technology, competition, the effect of globalization, the customers demand, the demographic trends and health care sector in terms of organizational staff well being. Hence the “what” answers the key portion of the plan. Who? Putting the right person to the job is as important measure in attainment of targets through proper guidance and leadership role. The leadership spectrum ranges from individual reasoning like planning, analysis, monitoring, evaluation and control. And these can be achieved through experience within an organization. The second feature that an employer must have is emotions that determine the quality of the person in terms of crisis. Hence the answer must be formulated on who would do the specific job and gain results for the organization. How? The execution of the plan must be addressed with this part of the question. All previously planned goals must be implemented for the achievement of objective and aims set by the organization. For this to happen six key supporting features must always be part of implementation process, which are ongoing actions planning, organization structure, development of human resource, the annual plan, monitoring and control and a overall linkage that combines all aspects of the implementation. An example In the year 2003, Volkswagen (VW) group of America entered into an alliance with Apple Company for an advertisement promotion called “Pods Unite”, in which all customers who brought the 2003 Hardtop Beetle 10 model received a free iPod; this was a part of strategic planning of the company to increase its car sale. This eventually saw the iPod enthusiasts buying the car in great numbers, clearly explaining the well planned strategy of the VW group in terms of customer demand and satisfaction. (Ireland, Hoskisson & Hitt, 2008). Quoting another example from VW group in terms of clever business is famous hedging strategy in the year 2003 (Hedging- any technique designed to reduce or eliminate financial risk). This is of a great historical importance, the company had a shocking 95 percent drop in its fourth –quarter profits in the year 2002 accounting to a loss of about 50 million Euro. Two basic reasons were the rise in the value of Euro in the year 2003 and the company’s international currency hedging was cut down to 30 percent from the usual 70 percent. This meant that the manufacturing cost of the Volkswagen car (Jetta) was dropped when it was exported to US and the exchange rates made a huge difference in the company’s profit and this led to a sharp dip in their fourth-quarterly profits. At this moment Volkswagen group framed a strategy so as to come under a forward contract for dollars and aimed at a stable exchange rate of €1=$1, regardless of what the current exchange price were for a specific period of time . Even though the company suffered a huge loss in terms of profit and through high commission to foreign exchange dealers it reinstated the traditional 70 percent hedging from then on after recovering from the market. (Hill & Jain, 2009) Conclusion This report is successfully completed by describing the integral nature of a corporate strategy, enumerating why and how integration among the businesses within a large organization is an important aspect in bringing out the vision and mission of the organization. Also keeping a track of the four key dimensions of a well-developed business strategy that would help a business to flourish and keep its high standards. The Why, What, Who and How of business enumerates us the basic of any successful organization. And finally taking an example from the Volkswagen group on how they planned their strategy after a Hugh profit loss in the year 2003. References Dubey, S.S. (2009), It Strategy And Management, New Delhi: PHI Learning Pvt. Ltd. Gallagher, G. (2010). An Integrated approach to developing and implementing strategy in Hotels. [online]. Available at: http://www.shannoncollege.com/wp-content/uploads/2009/12/THRIC-2010-Full-Paper-G.-Gallagher2.pdf. Accessesd on 22 march, 2011. Kourdi, Jeremy (2009), Business Strategy: A Guide to Taking Your Business Forward Volume 12 of The Economist, London: Bloomberg Press. Ireland, R.D., Hoskisson, R.E. & Hitt, M.A. (2008), Understanding Business Strategy: Concepts and Cases, Mason, OH: South-Western Cengage Learning. Hill, C.W.L & Jain A.K (2009), International Business, Competing in Global Marketplace, New York: Tata McGraw-Hill Education. Sudi.S (2003), Creating Value from Mergers and Acquisitions, New Delhi: Dorling Kindersley (India) Pvt. Ltd. McCabe, Steven (2010), Corporate Strategy in Construction: Understanding Today's Theory and Practice, Malden, MA: John Wiley and Sons. Read More