Corporate and Business Unit Strategy

Strategy and Strategic Planning October 25, 2025
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Introduction

For diversified companies and holding groups, the core strategic challenge lies in determining the scope of the firm (corporate strategy) and how each business unit competes (business unit strategy). This course provides a clear framework for defining the relationship between the corporate center and its operating units. Participants will learn how to evaluate diversification strategies, manage the overall portfolio, and ensure that the corporate center provides **parenting advantage**—value that a business unit could not achieve on its own. The program ensures alignment, effective resource allocation, and optimized strategic scope across the entire enterprise.

Objectives

To provide senior leaders and strategists in multi-business corporations with the frameworks to define the firm's scope, manage its portfolio, and optimize the relationship between the corporate center and its business units:

Target Audience

  • C-Level Executives in diversified companies and holding groups.
  • Heads of Corporate Strategy and Corporate Development.
  • General Managers and CEOs of Business Units.
  • Senior Managers responsible for M&A, Divestiture, and Portfolio Management.
  • Financial Analysts focused on multi-business conglomerates.
  • Internal Consultants advising on organizational structure and governance.

Methodology

  • Case studies of successful and failed diversification strategies (e.g., GE, Virgin Group).
  • Group exercise in analyzing a diversified portfolio using the BCG and GE matrices.
  • Workshop on calculating and justifying the "Parenting Advantage" for a business unit.
  • Structured debate on the appropriate level of autonomy for a business unit leader.
  • Templates for business unit strategic performance scorecards.

Personal Impact

  • Master the complex interaction between corporate and business unit strategy.
  • Enhanced ability to manage and optimize a diversified corporate portfolio.
  • Develop skills to assess strategic fit and justify diversification moves.
  • Improved knowledge of governance structures that minimize corporate costs and maximize unit value.
  • Ability to define and deliver a clear "Parenting Advantage" as a corporate leader.

Organizational Impact

  • More effective capital allocation and higher ROI across the enterprise portfolio.
  • Clearer strategic focus and purpose for each business unit.
  • Reduced organizational friction and conflict between the center and the units.
  • Higher valuation multiples from the investment community due to strategic coherence.
  • Increased agility to divest non-performing assets rapidly.

Course Outline

Unit 1: Foundations of Corporate Strategy

Defining the Scope of the Firm
  • The core test of diversification: Does it create more value than the costs?
  • Evaluating related vs. unrelated diversification strategies.
  • The role of vertical integration decisions in corporate strategy.
  • Identifying the strategic rationale for remaining a multi-business firm.
The Concept of Parenting Advantage
  • Defining the specific value the corporate center adds to its business units (e.g., expertise, resources, governance).
  • Analyzing the parenting fit between the corporate center's style and the business unit's needs.
  • Strategies for reducing bureaucratic costs and managing corporate overhead.

Unit 2: Portfolio Management and Resource Allocation

Portfolio Analysis Tools
  • Advanced application of the **BCG Growth-Share Matrix** and **GE/McKinsey Matrix**.
  • Using portfolio tools to inform resource allocation and investment priorities.
  • Identifying units for aggressive investment (Stars), harvesting (Cash Cows), or divestiture (Dogs).
Strategic Resource Alignment
  • Establishing a clear capital budgeting process that links to portfolio strategy.
  • Managing strategic trade-offs and contention for scarce corporate resources.
  • The process of strategic divestiture and maximizing the value of the spin-off.

Unit 3: Business Unit Strategy Development

Defining Competitive Strategy at the BU Level
  • Reviewing Porter's generic strategies and their application within a portfolio.
  • Ensuring the BU strategy leverages the unique resources of the corporate center.
  • Managing competition and cooperation among internal business units.
Measuring BU Performance
  • Designing strategic KPIs and internal accounting metrics (e.g., transfer pricing) that reinforce corporate goals.
  • The role of the Business Unit Balanced Scorecard in driving strategic execution.
  • Aligning BU management incentives with overall corporate value creation.

Unit 4: Corporate Governance and Organizational Structure

Designing Effective Corporate Governance
  • Structuring the relationship between the corporate board, executive committee, and BU leadership.
  • Establishing the appropriate level of autonomy for business unit decision-making.
  • The role of the Strategy Management Office (SMO) in managing alignment.
Organizational Structures
  • Analyzing structural options (e.g., functional, matrix, multi-divisional/M-form) and their strategic fit.
  • Managing the dynamics and politics of the corporate center-BU interface.

Unit 5: Strategic Growth and Renewal

M&A, Alliances, and Portfolio Growth
  • Using corporate strategy to define clear M&A targets and criteria.
  • Leveraging business unit capabilities to pursue organic growth in new markets.
  • Strategies for corporate renewal and turning around underperforming units.

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