Title: Why Is Corporate Strategy Important? | Bizfluent
Headings: Why Is Corporate Strategy Important?
Why Is Corporate Strategy Important?
Allocates Company Resources
Establishes Expectations
Improves Competitive Position
Adds Shareholder Value

Content: In doing so, strategic management limits a company’s authorized initiatives, which leaders select based on the company’s resources and the external environment in which it competes. The importance of a corporate strategy hinges on its being an effective means to allocate a company’s resources, establish business expectations and improve a company’s competitive position, as well as increase shareholder value to something beyond the sum of its physical assets. Allocates Company Resources
A corporate strategy is a tool a company uses to limit the allocation of its resources to the best available business investment opportunities. 00:00
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During strategic planning and budgeting processes, a company assesses the performance of each business unit. Based on its findings, the company acquires and divests assets and revises resource allocations. Leaders allocate company resources according to the desirability of each business unit’s market opportunities, which determines its planning priorities. Establishes Expectations
A company conveys its corporate strategy to individual business units to drive performance and establishes the expectations of internal and external stakeholders, or those with an interest in the success of a company. Corporate objectives focus on key areas, such as market standing, productivity and profitability, for which measurable objectives are set, such as achieving a particular market share or financial return on investments. It’s through expectations that stakeholders align their activities with strategic goals and assume particular roles to ensure a corporate strategy is carried out successfully. Improves Competitive Position
The corporate strategy is concerned with a company’s growth and profit performance.