Fundamentals of Corporate Strategy


Strategy, in simple terms refers to the plan one has to achieve his/her objective, its about how we would get "there", its futuristic and with the aim of attaining defined goals in the future. In other words, Strategy is the approach selected to achieve defined goals in the future.

Strategy Defined

Strategy, in simple terms refers to the plan one has to achieve his/her objective, its about how we would get "there", its futuristic and with the aim of attaining defined goals in the future. In other words, Strategy is the approach selected to achieve defined goals in the future. Strategy is identifying the long term goals of the business and then selecting the means, and allocating the resources for carrying out those goals. Strategy be it financial, strategic management, IT Strategy or HR Strategy it has to have three things, one the Objective that needs to be achieved, identification of resources/means that would faciliate the pursuit of objective and how one intends to attain the objectives. Strategy is the set of decisions and actions resulting in the formulation and implementation of strategies designed to achieve the objectives of an organization.’

All the various strategies that are formulated in the business has three fundamental characteristics.

Fundamental Charactreristics of Strategy

Forward Looking

Organisation has to think ahead, plan ahead and move forward but not to forget the past experiences, reflection on the past is a great source of learning, Strategy must be forward looking, focused on taking the organisation forward. Strategy is about making a clear decison on where to go and how to get there. It is concerned with both ends and means. Strategy, in a sense is a declaration of intent: "This is what we want to do and this is how we intend to do it."

Organizational Capability

The second characteristic of strategy is that the organizational capability of a firm (its capacity to function effectively) depends on its resource capability (the quality and quantity of its resources and their potential to deliver results). Organizations that have the capability and hold of resources that are can produce efficienet and effective results are bound ot have higher chances of achieving its strategic objectives. failing to recognise the resource capability can have serious implication as it would fail the orgnaisation in taking maximum benefit out of the opportunity in the business environement and could increase potential threats for the business. Strategy is a balance between the exploitation of existing resources and the development of new ones’.

Strategic Fit

The third characteristic of strategy is strategic fit the need when developing HR strategies to achieve congruence between them and the organization’s business strategies within the context of its external and internal environment. Internally the business needs to vertically align its strategices as this would help establish a focus of direction in the whole organisation, where as horizontally the strategies must compliment eachother and aid in heading towards the right direction with the right focus. The focus is upon the organization and the world around it. To maximize competitive advantage a firm must match its capabilities and resources to the opportunities available in its environment. The concept of fit or integration is also a major feature of strategic HRM.

How to Make a Coroporate Strategy

The fundamentals of corporate strategy provide a framework for organizations to define their long-term goals, make strategic choices, and allocate resources to achieve a competitive advantage and sustainable success. Here are some key elements of corporate strategy:

Vision and Mission:

Corporate strategy begins with establishing a clear vision and mission that articulates the organization's purpose, values, and desired future state. The vision provides a compelling picture of what the organization aspires to become, while the mission defines its core purpose and the value it offers to its stakeholders.

External Analysis:

A fundamental aspect of corporate strategy is conducting an analysis of the external environment. This involves assessing industry trends, competitive forces, market dynamics, and opportunities and threats that impact the organization's operations and strategic decisions. It helps identify potential risks and opportunities for growth and informs the organization's strategic direction.

Internal Analysis:

An internal analysis focuses on evaluating the organization's resources, capabilities, and competitive advantages. This includes assessing the organization's strengths, weaknesses, core competencies, and unique assets. Understanding internal factors helps identify areas where the organization has a competitive edge and areas that need improvement or investment.

Strategic Goals and Objectives:

Corporate strategy sets clear goals and objectives that guide the organization's actions and resource allocation. Strategic goals should be specific, measurable, achievable, relevant, and time-bound (SMART). They provide a roadmap for the organization to work towards its vision and mission, aligning efforts across different levels and functions.

Competitive Positioning:

Corporate strategy involves determining the organization's competitive positioning in the market. This includes defining the target market, understanding customer needs and preferences, and developing a unique value proposition. By differentiating themselves from competitors, organizations can create a sustainable competitive advantage.

Resource Allocation:

Effective corporate strategy involves allocating resources strategically to support the achievement of strategic goals. This includes financial resources, human capital, technology, and other assets. Resource allocation decisions need to consider priorities, trade-offs, and alignment with the organization's strategic objectives.

Strategic Initiatives and Action Plans:

Corporate strategy translates high-level goals into actionable initiatives and action plans. These initiatives define the specific projects, programs, or actions required to execute the strategy. They include timelines, responsibilities, performance indicators, and budgets to ensure effective implementation and monitoring of progress.

Evaluation and Adaptation:

Corporate strategy requires continuous evaluation and adaptation. This involves monitoring progress towards strategic goals, analyzing outcomes, and making adjustments as necessary. Regular review allows organizations to assess the effectiveness of their strategy, learn from successes and failures, and adapt to changing market conditions or new opportunities.

Organizational Alignment:

Corporate strategy requires aligning the organization's structure, processes, culture, and talent with the strategic direction. It involves ensuring that the entire organization understands and supports the strategy, fostering a culture of innovation, collaboration, and strategic thinking, and developing capabilities needed to execute the strategy effectively.

By incorporating these fundamental elements, organizations can develop a corporate strategy that provides a roadmap for success, guides decision-making, and ensures the organization remains agile and competitive in a dynamic business environment.


Armstrong, M., (2009). Handbook of Human Resource Management. 11th Edition. Kogan Page: London.