What is Corporate Strategy?

Definition: Corporate strategy encompasses a firm’s corporate actions with the aim to achieve company objectives while achieving a competitive advantage.

What Does Corporate Strategy Mean?

What is the definition of corporate strategy? A corporate strategy entails a clearly defined, long-term vision that organizations set, seeking to create corporate value and motivate the workforce to implement the proper actions to achieve customer satisfaction. In addition, corporate strategy is a continuous process that requires a constant effort to engage investors in trusting the company with their money, thereby increasing the company’s equity. Organizations that manage to deliver customer value unfailingly are those that revisit their corporate strategy regularly to improve areas that may not deliver the aimed results.

Let’s look at an example.


Corporate strategies may pertain to different aspects of a firm, yet the strategies that most organizations use are cost leadership and product differentiation.

Cost leadership is a strategy that organizations implement by providing their products and services as low as consumers are willing to pay, thereby being competitive and realizing a volume of sales that allows them to be the leaders in the industry. Typical examples of cost leaders are Wal-Mart in the retail industry, McDonalds in the restaurant industry, and Ikea, the furniture retailer that offers low-priced, yet good quality home equipment by sourcing its products in emerging markets, thereby having a high-profit margin.

Product differentiation refers to the effort of organizations to offer a unique value proposition to consumers. Typically, companies that manage to differentiate their products from the competition are gaining a competitive edge, thereby realizing higher profits. Often, competitors employ cost leadership to directly compete with these companies; yet, customer satisfaction and customer loyalty are the factors that eventually make or break a strategy.

Other examples of corporate strategies include the horizontal integration, the vertical integration, and the global product strategy, i.e. when multinational companies sell a homogenous product around the globe.

Corporate strategies are always growth-oriented, seeking to retain a company’s existing customer base while attracting new customers.

Summary Definition

Define Corporate Strategies: Corporate strategy means a company’s vision and tactics to outperform its competition.