✅ Core Sub-classifications of Corporate Strategy:
Classification Type | Description | Key Focus Area |
---|---|---|
1. Parenting Strategy | How the parent company adds value to its business units | Value addition, synergy, coordination |
2. Portfolio Strategy | How to manage the mix of businesses (SBUs) | Business selection, resource allocation |
3. Directional Strategy | The overall direction of the firm: growth, stability, or retrenchment | Path of development |
🔷 1. Parenting Strategy
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The corporate headquarters (parent) adds value to the individual businesses (children).
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Focus: Synergy, support services, shared competencies.
📌 Example: Tata Sons guiding Tata Motors, TCS, and Tata Steel differently based on their needs.
🔷 2. Portfolio Strategy
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Determines which businesses to enter/exit, and how to allocate resources.
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Uses tools like:
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BCG Matrix
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GE-McKinsey Matrix
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Ansoff’s Product Market Growth Matrix
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📌 Example: A company selling off a “dog” SBU (low growth/low share) and investing in a “star” unit.
🔷 3. Directional Strategy
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Guides long-term direction:
🔹 Growth
🔹 Stability
🔹 Retrenchment
These become umbrella choices under which further strategies (like Integration or Diversification) are selected.