Question

Discuss the use of single and dominant corporate-level strategies. When are single or dominant strategies preferred over diversified strategies?

Answer 1

Corporate level strategies are employed by companies to position their business in the market. These strategies are developed with the objective of achieving the business goals. There are various strategies that the company may employ. One of them is the diversification strategy. This strategy is focused on the nature of the products and services offered by the company. Based on that nature, strategy of the company is formulated.

There are basically 2 types of diversification strategy:

• Single corporate level strategy: This type of strategy is employed in businesses where the organization earns more than 95% revenues from a single offering. This strategy is employed if the company wants to dive into niche segment. For example: Wrigley.
• Dominant corporate level strategy: This type of strategy is employed in those businesses where the majority revenue comes from one offering, but there are other business offerings as well. Example: American Airlines