Regardless of what your business does or the industry that you work in, success is likely to be your main focus, and understandably so. In order to achieve business success, you need to think about the importance of putting a business level strategy and a corporate level strategy in place. Though these are both approaches to growing a business, they focus on different aspects of reaching your goals, and understanding what sets them apart is key.
A business strategy focuses on how a business can compete and grow in specific markets, while a corporate level strategy takes a long term view, with a focus on shaping the overall direction of things. Below, we’ve taken a look at the differences between the two strategies, and we explain how to determine which should be a priority for your business.
What is a Business Level Strategy?
There are a lot of ways to approach managing your business’ strategy, one of which focuses on how different aspects of your business can achieve set objectives. A business level strategy looks at how you can put various plans into place to reach your goals. It looks at the bigger picture, whilst also looking at what different business units need. A business level strategy is a short term strategy aimed at improving your business’ overall competitive advantage and expanding your market share. These strategies are tailored to fit the unique goals of a department or team, and the goals of those putting the strategy into action.
A business level strategy allows you to gain a better understanding of your competitors and your chosen marketplace, which helps you to find the best way to allocate your resources. With a business level strategy, you can also create a plan for how you’ll respond to changes in the marketplace, including changing customer behaviour and market trends.
What is a Corporate Level Strategy?
A corporate level strategy is a different approach to business growth, one that focuses on having a long term plan that outlines the overall direction and goals of the entire business. It determines where the business aims to be in the future, and uses this information to create a plan of how you’ll get there. A corporate level strategy acts as a guide, and individual business units and departments can operate with this in mind, aligning everyone’s efforts towards your broader objectives.
Corporate level strategies focus on decisions that affect the long term profitability, stability, and growth of your business. You can view a corporate level strategy as the driving force that shapes the business’ future success and direction, giving everyone something to aim for.
6 Key Differences Between Business Strategy and Corporate Level Strategy
Though a business level strategy and corporate level strategy are both ways to approach business growth, there are some key differences between the two approaches. Here are six things that set them both apart.
1. Profitability vs. Competitive Advantage – Corporate strategies prioritise the business’ overall profitability, stability and long term success. This involves making decisions that ensure the business is sustainable over a long period of time. Business strategies are more focused on increasing competitive advantage and expanding market share. These strategies aim to outperform competitors and grow within a specific market.
2. Company vs. Departmental Focus – A corporate strategy guides the entire business. It sets a broad vision for everyone in the business, but business strategies are tailored to specific departments or units. They break down the business’ overall aim into smaller objectives for different teams, ensuring that every part of the business works toward the same goal. Each department contributes to overall business success, whilst also working on its own personal goals.
3. Long Term vs. Short Term – One of the main differences between a business level strategy and a corporate level strategy is the fact that one focuses on the long term, and the other focuses on the short term. A corporate level strategy is typically long term, focused on the future vision of the entire business. It outlines where the business wants to be in the next few years. A business level strategy is more short term, concentrating on achieving goals immediately. While corporate strategies set the overall direction, business strategies focus on how to achieve specific goals in the much nearer future.
4. Decisions vs. Actions – Corporate level strategies focus on decision making, usually related to resource allocation, market expansion or developing new products These are choices that change the business’ direction. On the other hand, business strategies are driven by actions. They focus on the practical steps that must be taken to meet the bigger goals. A corporate level strategy guides where the business is going, while a business level strategy outlines how it will get there.
5. Leading from the Top vs. Departmental Leadership – A corporate strategy is typically developed by leaderships at the very top of a business, such as the CEO or CSO. They set the business’ overall direction. Business strategies are slightly different, because they are executed by business unit leaders, department heads and teams, on a more personalised basis.
6. Diversification vs. Competitive – Corporate strategies tend to involve diversification in some form, including mergers and acquisitions. These strategies are focused on expanding the business’ reach into new markets or industries. Business strategies are more specific to competitive tactics within a particular market, such as cost leadership or differentiation. While a corporate strategy looks at overall growth through new ventures, a business strategy concentrates on how to compete effectively in an existing market.
Choosing Between a Business Level Strategy and a Corporate Level Strategy
As a business, you need to decide between a business level strategy and a corporate level strategy, choosing where to focus your attention. A business level strategy is ideal when your main goal is to gain a competitive edge within your existing market. If your business operates in a single industry or a niche market, this usually means focusing on how to differentiate yourself from competitors and how to attract more customers.
A corporate level strategy tends to be the better option if you’re looking for long term growth opportunities beyond your current market. If your business has multiple divisions or if operates in various industries, a corporate level strategy can help you coordinate your goals across them all. Here are some things to consider when you’re deciding which route is best for your business.
- Stage of Growth – If your business is in its early stages of growth, or if you’re looking to gain a competitive advantage in an existing market, the importance of a business level strategy cannot be ignored. But, if you have an established business and your focus is on expanding into new areas, a focus on corporate level strategies might be better.
- Market Conditions – Competition within your current market could be a sign that you need a business level strategy to improve your market position. If your market is already crowded, or if you’re looking for more growth opportunities, a corporate level strategy could help you break into new markets.
- Long Term Plans – A business level strategy can help you to achieve short term objectives and performance improvements. But, a corporate level strategy is better for long term growth goals, ensuring that your business can scale, diversify and sustain profitability going forward.
- Company Size – The size of your business will impact which strategy you choose. Small businesses are likely to benefit from focusing on things from a business level, with a focus on how to succeed in a specific niche. But, larger businesses usually benefit from getting all divisions on the same page, and guiding expansion with everyone together.
Understanding the differences between business strategy and corporate level strategy is essential for steering your business toward success. But, with so much to familiarise yourself with, it’s often easier to seek the help of an expert team. This is where Profici comes in. While business strategy focuses on short term actions to improve competitive advantage within specific markets, corporate level strategy is about long term decisions that shape the entire business’s sustainability. Regardless of what your business goals are, our growth partners are on hand to help you achieve your goals. Contact us to find out more.
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