What Are the Key Elements of Enterprise Strategy?

Enterprise strategy, or corporate strategy as it is also known, is the broadest form of strategy within a business. Enterprise strategy deals with the issues that affect the firm as a whole. It is typically developed at a high level within the firm, by the board of directors or the top management team. Understanding enterprise strategy is simple if you familiarize yourself with the basic elements.

A key element of enterprise strategy is the use of industry analyses. The most popular analysis framework is the five forces framework that considers five external forces in the markets: bargaining power of suppliers, bargaining power of customers, threat of new entrants, threat of substitutes and industry rivalry. Based on these forces, a firm can decide whether or not it is wise to enter an industry.

Deciding what core competences a company needs to focus on is something that happens at the enterprise level of strategy. A core competence is a key skill that gives a firm a competitive advantage. Examples of core competences can include production, design or any other firm capability. Top managers need to decide which competences are key to the success of the business so that they may focus on these capabilities.

Long-term planning is a central element of enterprise strategy. Long-term planning is the attempt to understand and map the future of the company. Based on historic data, it is possible to predict future patterns in the markets and in the development of the firm. Using these predictions, it is possible to make a long-term plan for the firm.

The financial structure is an element that plays a large role in enterprise strategy. The financial structure refers to the financing of the firm and whether that comes from debt, equity or a combination of both. This element of strategy must be decided at the enterprise level because it is something that affects the overall company, not just individual business units.