Every business combats competition in the marketplace, so it needs a plan to outperform the competition and achieve results. Companies adopt an integrated plan to attain organizational objectives, which is known as strategy.
There are three layers of strategy in any organization: corporate strategy, business strategy, and functional strategy. A company can only prosper if all three levels of strategy are thoroughly considered.
So, what exactly is the difference between corporate and business strategy?
Business Strategy VS Corporate Strategy- Overview
Corporate Strategy:
Corporate strategy is primarily created to guide businesses in achieving their long-term goals. A corporate strategy is developed in accordance with the organization’s goals and scope of operations.
It also evaluates the nature of the business by considering its operational environment, market position, and the level of competition it faces.
“What businesses or sectors should we be working in?” is the issue that corporate strategy aims to answer. It focuses on creating a diverse set of business units that will allow it to attain overall success.
Business Strategy:
Most larger companies have many business units or divisions that are dispersed throughout the various businesses and marketplaces in which the company has chosen to operate.
A product department or any other profit center with objectives that differ from the rest of the organization’s business divisions is considered a strategic business unit. Business strategy is a type of strategy created at this level to determine how an organization expects to achieve its objectives in a specific business unit.
At the business level, the planning process is concerned with how the company competes with other companies in the industry.
Business Strategy VS Corporate Strategy- Developed By
Corporate Strategy:
The CEO is ultimately responsible for an organization’s entire corporate strategy. The strategy is usually devised by the CEO in collaboration with the company’s other senior executives and input from the management board. Some CEOs may opt to hire a senior executive who is solely responsible for strategies, such as a Chief Strategy Officer, Vice President of Strategy, or Director of Corporate Strategy. Any organization’s corporate strategy is always developed by the company’s top level of leadership.
Business Strategy:
The business unit head, and their executive team will oversee the business strategy. Each functional lead or department head may have their own departmental strategy, which defines their unique plan for attaining the company strategy’s objectives and goals that they are accountable for.
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Business Strategy VS Corporate Strategy- Strategic Decisions
Corporate strategic decisions are often analytical and focused on creating value, organizational growth, and profit maximization. It is developed at the executive level, focusing on the entire company, encompassing various business units and divisions.
On the other hand, strategic choices at the business level refer to the operations carried out to provide value for consumers and gain a competitive advantage in the market. It is relevant to a specific division or unit.
Business Strategy VS Corporate Strategy- Term
Corporate strategies are helpful in coming up with long-term solutions to challenges.
On the other hand, business strategies are helpful in resolving the practical and ordinary challenges that arise in business operations and are therefore short-term in nature.
Business Strategy VS Corporate Strategy- Focus
The goal of corporate strategy is to figure out what kind of business the firm wants to be in within the industry.
Whereas business strategy focuses on developing the business plan that should be used to attain organizational goals.
Business Strategy VS Corporate Strategy- Conclusion
Companies need to have effective methods for attaining their goals. Organizations use corporate strategies to help them achieve their long-term goals. Business strategies are critical for achieving particular organizational objectives at the business unit level.
The organization can accomplish its long-term objectives of organizational revenue and profitability maximization and short-term goals of effectively competing in the market with other organizations when appropriate strategies are in place.
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