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Corporate Level Strategy

Corporate strategy refers to the overall strategy for a diversified company. It is concerned with the mix of businesses the company should compete in, and the ways in which strategies of individual units should be coordinated and integrated.

Reference Chapters in On Competition

"From Competitive Advantage to Corporate Strategy"

     On Competition, Chapter 5
     Michael E. Porter
Corporate strategy is what makes the corporate whole add up to more than the sum of its business parts.  The track record of corporate strategies had been dismal.  A study of the diversification records of 33 large U.S. companies from 1950 to 1986 shows that diversification--whether through acquisition, joint venture, or start-up--generally has not brought the competitive advantages or profitability expected. Portfolio management, restructuring, transferring skills, and sharing activities are four concepts of corporate strategy that companies most commonly use. Portfolio management no longer works very well in the United States because of its highly developed capital market. Restructuring is merely a stopgap measure that will not build shareholder value over the long term because it usually produces an unwieldy conglomerate. Companies have the best chance of being successful at diversification if they capitalize on the existing relationships between business units by having them transfer skills and share activities.


Publications In the News

"The Competitive Advantage of Corporate Philanthropy"
     Michael E. Porter and Mark R. Kramer
     Harvard Business Review, December 2002
When it comes to philanthropy, executives increasingly see themselves as caught between critics demanding ever higher levels of "corporate social responsibility" and investors applying pressure to maximize short-term profits. Increasingly, philanthropy is used as a form of public relations or advertising, promoting a company's image through high-profile sponsorships. But there is a more truly strategic way to think about philanthropy. Corporations can use their charitable efforts to improve their competitive context--the quality of the business environment in the locations where they operate. Using philanthropy to enhance competitive context aligns social and economic goals and improves a company's long-term business prospects. Addressing context enables a company not only to give money but also leverage its capabilities and relationships in support of charitable causes. Taking this new direction requires fundamental changes in the way companies approach their contribution programs. Adopting a context-focused approach requires a far more disciplined approach than is prevalent today. But it can make a company's philanthropic activities far more effective.
Order article reprint at Harvard Business Online


The Pluses in Corporate Philanthropy
     Michael E. Porter and Mark R. Kramer
     Boston Globe, January 13, 2003

The Tax Cut That Could Pay Dividends
     Michael E. Porter
     The Financial Times, January 13, 2003

"Michael Porter's Big Ideas"
     Keith H. Hammonds
     Fast Company, March 2001.
The world’s most famous business-school professor is fed up with CEOs who claim that the world changes too fast for their companies to have a long-term strategy. If you want to make a difference as a leader, you’ve got to make time for strategy.

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