MANAGEMENT SKILLS - Corporate Planning Strategies

Corporate Planning Strategies

by Osmond Vitez, Demand Media

Corporate planning strategies give your company direction to grow.

Corporate planning strategies provide business owners with specific guidelines or rules for improving business operations and advancing the company’s mission. Corporate planning strategies provide these guidelines as they relate to the entire company. These strategies provide managers and employees with a targeted direction for the company. Business owners can also use strategies as a reference to ensure certain business opportunities that will overextend the company’s resources are avoided.

Growth

Corporate growth strategies are most common in new business ventures. Common types of corporate planning growth strategies include concentration, vertical integration and diversification. Concentration strategies allow companies to enter economic markets and generate high levels of market share. Businesses achieve this through offering unique products and providing efficient customer service operations.

Vertical integration growth strategies allow businesses to expand their operations by adding new corporate activities. These activities can involve creating a supply chain for moving goods into retail stores or creating raw materials for use in production processes.

Businesses use diversification growth strategies to sell consumer products in multiple economic markets or add a wide variety of consumer goods and services to their product mix. Diversification strategies often involve selling goods and services in regional, national or international economic markets.

Stability

Business owners use stability strategies to outline a corporate plan for maintaining a certain level of business operations. These strategies commonly evolve after a company has exited the growth strategy planning process. Corporate stability planning strategies provide outlines for refining current business operations and increasing profitability. Business owners use this strategy to extend internal production, advertising, sales and other business strategies. Stability strategies are often found in stable economic environments where business owners are not too concerned with a contraction in the local economy.

Retrenchment

Retrenchment strategies usually involve the downsizing or reduction of a company’s operations. These planning strategies can be used in anticipation of economic contractions or a slowdown in the company's business industry. Business owners can use a turnaround, divestment or liquidation corporate planning strategy. Turnaround strategies may involve a temporary reduction in business operations. This reduces operating costs during periods of low cash flow so companies can remain viable in the business environment.

Divestment planning strategies involve a permanent reduction in the company’s operations. Larger business organizations often use these planning strategies to close down or sell a portion of their company’s operations. These planning strategies result in a permanent change to current business operations.

Liquidation planning strategies are implimented to permanently close business operations. Liquidation will result in the business being sold to a competitor or shutting down operations and all business assets sold to pay outstanding debts. The liquidation process can take several months or years depending on the organization’s size. This planning strategy is usually the final option if previous retrenchment strategies are unable to salvage the company’s operations during economic contractions or other