Corporate finance

Páginas: 4 (940 palabras) Publicado: 2 de septiembre de 2010
First of all, the Corporate strategy will ask you to answer fundamental questions such as "Why are you in business?" and "Why are you in this particular business?".
Also, it’sconcerned with the organization’s positioning in terms of
* responsiveness,
* cost leadership and
* product differentiation
Corporate strategy is used to identify:
1.Businesses or industries that the company should compete in
2. Value creation activities that the company should perform in those businesses
3. Method to enter or leave businesses or industriesin order to maximize its long-run profitability.
The corporate strategy dictates the detailed strategies for each functional area (i.e., Operations, Finance, Marketing) but it is also affected bythose areas.
Collectively, all these strategies seek to exploit (external) opportunities and (internal) strengths, neutralize (external) threats, and address (internal) weaknesses.

Concentration on asingle business
* Advantages
* Operational focus on a single familiar industry or market.
* Current resources and capabilities add value.
* Growing with the market bringscompetitive advantage.
* Disadvantages
* No diversification of market risks.
* Vertical integration may be required to create value and establish competitive advantage.
*Opportunities to create value and make a profit may be missed.

Within Corporate strategy we can find some different strategies, as:
* Vertical and Horizontal Integration - Value Chain Activities* Portfolio Analysis
* Diversification

Vertical and Horizontal Integration - Value Chain
Vertical Integration:
* Coordinating upstream activities (those closer to the rawmaterials) with downstream activities (those closer to the customer)
* A company may expands its operations backward into industries that produces inputs to its products or forward into industries that...
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