The Triangle of Corporate Strategy

The corporate strategy triangle is a useful tool for understanding the process of strategic management. There are three sides to the triangle, which represent the dimensions of corporate strategy: resources; businesses; and structure, systems and processes. These dimensions are guided by the firm's vision, beliefs and goals. Managers should understand these elements of corporate strategy in order to better manage their own strategies.

The first side of the strategy deals with resources. Much of corporate strategy is concerned with resources. Human, capital and physical resources are the foundation of any firm. Having particular resources can allow a firm to be successful; for example having access to skilled laborers or possessing specialized machinery can provide the firm with a competitive advantage in the marketplace. Corporate strategy involves recognizing necessary resources and then gaining access to them, either by creating them internally or acquiring them externally.

The second side of the triangle deals with businesses. These, in the corporate strategy triangle, are the various business activities that a firm engages in. A firm may engage in one area of business -- like Wal-Mart, which only operates retail stores -- or several different businesses, like General Electric which is involved in everything from finance to light bulbs. A corporate strategy must decide which businesses to focus on, whether they should be diversified or focused, and if they should be few or many.

The final side of the triangle is the firm's structure, systems and processes. In essence, these refer to how the business operates, how it it is organized and how it completes the tasks that it does. This can be a critical key for the success of a strategy. Nike, for instance, is a company that has become hugely successful because it has focused on developing its marketing processes.

The interior of the triangle consists of vision, beliefs and goals. These are the real core of corporate strategy. These three factors all influence the three sides of the triangle. For instance, if the firm has a vision of becoming a large multinational player, then it will need to gain international resources.