The business environment is dynamically changing corporate strategy is concerned with understanding as well choosing and implementing, the strategy or strategies that an organization follow. The organization direction and broad purpose which is articulated and understood and are summarized in the form of the mission statement. Strategic management incorporates major changes of direction for the whole business, such as diversification and growth overseas. This helps in controlling the diversifications and changes in an organization which resonates from the company structure. This improves on company growth and maximizes on profits.
As the business Progresses, a Company may need to use strategic alternatives either to cushion against loss or from other companies. An effective corporate strategy is one that enables an organization to achieve its objectives. J&J Company may adopt low levels of diversification strategy in which the company targets single business and dominant business. One of the biggest advantages of this kind of strategy is the increased revenue and profits. But this may also pose a big challenge to the company as it may reduce the growth capacity of the company.
J&J Company may adopt the high level diversification strategy which may prompt growth in the business or slow it down as more revenues on advertising will need to be used to make the customers aware of the new brand. This strategy requires the company to increase on advertising the product to increase awareness. This may prompt J&J to increase on budgetary allocations on advertising for the new products. The major con about this strategy would be the decrease in sales of products that have been doing well without the new brand. Corporate strategies are effective and efficient when well planned as the company is able to know the risks involved.
Strategies in business are developed in order to provide well structured forms that help the organization to focus on their goals. The main purpose of business strategies is to improve on customer base and customer satisfaction. J&J may use focused cost leadership this in essence will entail the providing goods and services with acceptable features focused on a particular competitive segment. This may cause a decline in sale of major products in the market. This may lead to a decline in customer base thus leading to a decline on sales. J&J Company may also adopt focused differentiation in which goods and services are perceived to be substantially different with respect to a focused on a particular competitive segment. This will benefit the company by expanding their customer base as they will now discover the needs of the market through segmentation. Focused differentiation may cause the company on the other hand to lose customer base as few customers may fail to be satisfied with the new products. The market nature of the product reveals that well needed brand awareness needed to improve the competitive advantage of the product line.
Successful competitive and functional strategies add value in ways which are perceived to be important by stakeholders. Certain strategies that maybe used by J&J company include offensive/strategic, frontal and acquisition. The offensive/ strategic an action in which is designed to build competitive advantage or improve market position. In this case J&J Company is able to retain a higher position which helps to attract more customers and improve on customer base. On the other hand the strategy may fail if there is any bad publicity on the product range. This provides a brand innovation and helps with increasing on the product awareness.
Frontal competitive strategy is a direct forward attack on the competition. This strategy will help gain an advantage over the competition making it possible to introduce new products and designs in the market. The greatest disadvantage on this strategy would be a delay on the impact this would mean that the desired results will not be felt by the company. This strategy will help improve on the company image and improve through public relations and the use of brand awareness techniques that will improve the company product range.
A company may also use acquisition as a way of curbing competition by so doing they acquire their competition and leave no room for the competitor to flourish. J&J Company may use this strategy to improve on the company’s image. This strategy may only fail if the acquisitioned company is bankrupt. The J&J company may acquisition a company that produces the same range of products this will cause an effect in which they can broadly expand the company’s products.
In this part one of the recommended strategies is the low level diversification method as a corporate strategy this will help improve on the company ability to expand. This will give the company advantage as it will increase the number of products in the market, thus increasing the customer base. In the business strategies, focused cost leadership is the best way to go in attracting and retaining current customers. By using this strategy the company will improve on customer relations which later will result into customer satisfaction. In relation to the competitive strategy a company will need to be ready and tactful. The strategies to recommend are frontal and offensive/strategic actions. The reason why the two are recommended is because they will be directly towards the competition. This makes the market aware of their standing thus continuous improvement will emerge. This competitive strategy will make efforts to make it a brand name and household name in the corporate industry. The management will need a lot of resources and revenue to provide the kind of exposure required to sabotage the competition. All the above recommended strategies go together with the company objectives and this will improve on its image, customer base and revenues.
J&J company usage of the corporate strategies will give them an added advantage both in the corporate world and against their competitors. With such strategies they are able to fully proof their company and expand their limitations though research and development. With this J&J will enhance and cushion their company against losses and improve profits and revenues for products that have been introduced and the existing ones. By applying these strategies the company is able to evaluate their stand in the market and enhance growth in the corporate industry. Production and innovation of new product lines will require the company to review newer strategies that will benefit the company advantage. Corporate strategy is a well advancement of marketing strategies in the company as this makes them aware of the looming competition the business environment.
Thompson, J. L. (2001). Understanding corporate culture. Cengage learning.