Corporate strategy is an important element of each business. It helps to set goals for future development, or, on the contrary, make plans to lower the market presence. Building a corporate strategy is usually targeted at fighting existing or potential problems. The Clarins cosmetics brand (Clarins, 2016) is rather successful, yet it has the issues of the poor supply of retailers and the low level of control in foreign countries. The company does not have many local offices and is not presented in some countries at all. The corporate strategy should address those issues and define whether there is a possibility for a change.
The functional strategy describes the steps that should be taken to achieve certain goals through the core internal processes. They can include manufacturing, purchasing, supply, and sales. For instance, manufacturing is currently viewed as one of the most important processes in a business model. The goals for it may not only target the cost-cutting, but also the effect made on the environment. Regarding the issues of Clarins, the brand must work on their functional strategy applied to the supply process. Since there are regular situations of products being not in store, the corporation must review its logistics and warehousing management. Clarins can cooperate with the local distributors that have an opportunity to store larger amounts of cosmetics.
Stability strategies are opposed to steps taken to achieve growth and development. A company might choose to keep the current processes without changes if the business is doing well. These strategies help to save money on the new goals, especially in the situation when the market is unstable, and new initiatives may fail. However, stability strategies should not be chosen as a model for an extended period (West, Ford, & Ibrahim, 2015, p. 114). Sticking to them may result in the loss of possibilities for the business extension and the growth of revenues. Since the current economic situation is rather unpredictable, Clarins may choose to keep the stability course and put off the development strategies for better times. However, if the brand decides to expand to the South American market, it may strengthen its positions while other competitors wait for the end of the recession.
Competitive and Cooperative Strategies
The definition of these strategies lies in their name. Corporations can either choose to compete with others or work along with them. However, in the unstable economic conditions more and more businesses decide to combine both of these strategies (Wheelen & Hunger, 2012). Clarins is a very consolidated company. It does not use the services of other businesses. This is understandable since the industry of luxury cosmetics is quite narrow and the competition is high. A brand must ensure it has a unique offering for the customers.
Internal and External Growth Strategy
The internal growth strategy is targeted at the processes of the business itself. It may concern the development of the human resource base, the restructuring of the budget spending, and other initiatives. This strategy does not bring immediate results. Thus, it would be hard to evaluate whether positive or adverse outcomes are the results of these steps. As a part of the internal growth strategy, Clarins might restructure its managerial model. Creating more offices abroad could improve the situation by controlling the local sales processes. The external growth strategy, on the contrary, is based on merging with and acquiring other businesses. This would not be a beneficial tactic for Clarins since the company might lose its distinct image. However, its outcomes are immediate, and this strategy can be used for achieving fast results. The external growth strategy is opposite to the retrenchment. The latter is a strategy of inactivity and reducing market presence. This is certainly not the path that Clarins should take for addressing the issues of the lack of control.
A policy may either help to implement a corporate strategy, or, on the contrary, prevent its development. The core idea here is whether the corporate strategy matches the existing policy. If not, a new plan must be drafted. Speaking about the goals and values, it should not be discussed solely among the top management. CEOs must ensure their vision is translated to the employees (Valentine & Hollingworth, 2015). While a company sets goals based on its wish to develop, the policy chosen initially as a core value of the business may be different from the new plans. If it is so, customers may not understand the new course taken by the company. Thus, a business must always consider policy while drafting the strategic plan if it does not want to lose markets.
Every company has its core product or service that defines the whole strategy. In the case of Clarins, this is the line of skincare cosmetics made from the organic materials. Thus, all the decisions made regarding the corporate strategy must be based on the fact that Clarins is a sustainable brand that puts skin treatment higher than make-up coverage. Switching to the make-up promotion may result in the loss of customers who value their primary products. If the brand wishes to expand to the South American market, it should plan all the steps based on their initial proposal.
Corporate strategies have a significant effect on the decision-making process. While Clarins needs to change the way it supplies stores and controls the local processes, it should think of the strategic planning models. Ensuring the general course is the same at all stages will result in successful development.
Clarins. (2016). Frequently asked questions. Web.
Valentine, S., & Hollingworth, D. (2015). Communication of organizational strategy and coordinated decision making as catalysts for enhanced perceptions of corporate ethical values in a financial service company. Employee Responsibilities and Rights Journal, 27(3), 213-229. Web.
West, D., Ford, J., & Ibrahim, E. (2015). Strategic marketing: Creating competitive advantage. Oxford, UK: Oxford University Press.
Wheelen, T. L., & Hunger, D. J. (2012). Strategic management and business policy: Toward global sustainability. New York, NY: Pearson.