Difference Between Business Strategy and Corporate Strategy

Business strategy and corporate strategy are both essential components of a company’s overall strategic planning, but they serve distinct purposes. Business strategy focuses on how a specific business unit or division will compete in its market segment. It involves decisions related to products, pricing, distribution channels, and marketing tactics aimed at achieving competitive advantage.

Corporate strategy deals with the broader scope of the entire organization, encompassing decisions regarding portfolio management, resource allocation, mergers and acquisitions, and diversification strategies. While business strategy addresses the “how” of succeeding in a particular market, corporate strategy addresses the “where” and “why” of allocating resources across various business units to maximize overall performance and shareholder value.

Comparison Chart

Parameters of ComparisonBusiness StrategyCorporate Strategy
FocusWinning in a specific marketOverall direction and growth of the company
LevelHow a business unit competesWhere the company competes (industries, markets)
TimeframeShorter-term (1-3 years)Longer-term (5+ years)
Who sets itBusiness unit managerCEO and senior management
Examples* Launching a new product line * Entering a new market * Increasing market share* Acquiring a competitor * Diversifying into a new industry * Merging with another company
Business Strategy vs Corporate Strategy

What is Business Strategy?

Business strategy is a very important part of any company. It is the plan that a company uses to achieve its goals. A good business strategy will help a company achieve its goals quickly and easily.

Business strategy should be aligned with the company’s goals. Achieving the company’s goals is important for a successful business, and business strategy should be designed to help the company achieve its goals. The methods used to achieve the goals should be effective and appropriate to the company’s situation.

A business strategy is an important part of any company. It is what determines how the company will operate and what goals it will pursue. A good business strategy will help a company achieve its goals and achieve success.

What is Business Strategy

Defining Business Strategy

At its core, business strategy is the art and science of creating a plan that enables a company to achieve its objectives. It involves a thorough analysis of the business environment, including internal strengths and weaknesses, as well as external opportunities and threats. By understanding these factors, a company can develop a clear vision of where it wants to go and how it plans to get there.

Key Components of Business Strategy

  1. Mission and Vision: A company’s mission statement defines its purpose and reason for existence, while its vision statement outlines its aspirations for the future.
  2. Goals and Objectives: These are the specific, measurable targets that a company sets for itself, aligned with its mission and vision.
  3. Competitive Advantage: A company’s unique strengths and capabilities that set it apart from its rivals and enable it to capture market share.

Developing a Business Strategy

Crafting a winning business strategy requires a systematic approach and a deep understanding of the company’s internal and external environment. Here are the key steps involved:

1. Conduct a Situational Analysis

  • SWOT Analysis: Identify the company’s strengths, weaknesses, opportunities, and threats.
  • PESTEL Analysis: Examine the political, economic, social, technological, environmental, and legal factors that impact the business.

2. Define the Target Market

  • Market Segmentation: Divide the market into distinct groups of customers with similar needs and preferences.
  • Target Market Selection: Choose the most attractive segments to focus on based on factors such as size, growth potential, and alignment with the company’s strengths.

3. Formulate the Strategy

  • Generic Strategies: Decide on the overall approach to competing in the market, such as cost leadership, differentiation, or focus.
  • Competitive Strategies: Determine how to position the company relative to its rivals, such as through product innovation, customer intimacy, or operational excellence.

Implementing and Monitoring the Strategy

Having a well-crafted business strategy is only half the battle. The real challenge lies in putting it into action and continuously monitoring its effectiveness. Here’s what’s involved:

1. Resource Allocation

  • Budgeting: Allocate financial resources to support the strategy, prioritizing investments in areas that offer the greatest potential for growth and profitability.
  • Talent Management: Ensure that the company has the right people with the right skills in the right roles to execute the strategy effectively.

2. Performance Measurement

  • Key Performance Indicators (KPIs): Identify the metrics that will be used to track progress towards the company’s goals and objectives.
  • Balanced Scorecard: Use a comprehensive framework that measures performance across four key areas: financial, customer, internal processes, and learning and growth.

3. Continuous Improvement

  • Strategic Review: Regularly assess the effectiveness of the strategy and make adjustments as needed based on changing market conditions and performance data.
  • Organizational Learning: Foster a culture of continuous learning and innovation, encouraging employees to share ideas and best practices that can help the company stay ahead of the curve.

What is Corporate Strategy?

Corporate strategy is the plan that a company uses to achieve its goals. The methods used in the strategy should be effective and appropriate to the company’s situation.

The methods used in the strategy should be effective and appropriate to the company’s situation. The business should also have a clear vision of where it wants to go and what it wants to become. A corporate strategy is important because it helps a company stay in business and grow its company.

A corporate strategy should be designed to help the company achieve its goals. A corporate strategy should be aligned with the company’s vision and mission. The corporate strategy should be focused on the long-term success of the company. The corporate strategy should also be tailored to the company’s unique situation and business objectives.

What is Corporate Strategy

Key Components of Corporate Strategy

1. Mission, Vision, and Values

The foundation of any corporate strategy is the company’s mission, vision, and values. The mission statement defines the company’s purpose and reason for existing. The vision statement outlines the company’s long-term aspirations and what it hopes to achieve in the future. The values are the guiding principles that shape the company’s culture and decision-making.

2. Market and Industry Analysis

To develop an effective corporate strategy, companies must thoroughly analyze their target markets and industries. This includes identifying key trends, opportunities, and challenges, as well as assessing the competitive landscape and the needs and preferences of customers.

3. Competitive Advantage

A crucial aspect of corporate strategy is identifying and leveraging the company’s competitive advantages. These are the unique strengths and capabilities that set the company apart from its rivals and enable it to create value for customers in ways that others cannot easily replicate.

4. Resource Allocation

Corporate strategy also involves making decisions about how to allocate the company’s resources, such as its financial capital, human capital, and physical assets. This includes determining which business units, products, or initiatives to invest in and which ones to divest or de-emphasize.

5. Organizational Structure and Governance

The corporate strategy should also address the company’s organizational structure and governance model. This includes defining the roles and responsibilities of different business units and functions, as well as establishing clear lines of authority and accountability.

Implementing Corporate Strategy

Developing a corporate strategy is only the first step; the real challenge lies in implementing it effectively. This requires a sustained effort from all levels of the organization, as well as ongoing monitoring and adjustment to ensure that the strategy remains relevant and effective over time.

Some key considerations for implementing corporate strategy include:

1. Communication and Alignment

Ensuring that all employees understand the corporate strategy and how their individual roles and responsibilities contribute to its success. This requires clear and consistent communication from leadership, as well as mechanisms for soliciting feedback and input from employees.

2. Performance Metrics and Incentives

Establishing clear performance metrics and incentives that are aligned with the corporate strategy. This helps to focus everyone’s efforts on the most important priorities and encourages behaviors that support the strategy.

3. Continuous Improvement and Adaptation

Regularly reviewing and adjusting the corporate strategy based on changing market conditions, customer needs, and internal capabilities. This requires a culture of continuous improvement and a willingness to embrace change and innovation.

Differences Between Business Strategy and Corporate Strategy

Scope and Focus

  1. Business strategy is all about how a specific business unit or division within a company competes in its particular market. It’s like a game plan for winning in a specific industry or niche.
  2. Corporate strategy takes a bird’s eye view of the entire company. It’s about deciding which businesses or markets the company should be in, and how to manage and allocate resources across those different business units.

Decision-Making Level

  1. Business strategy decisions are made by the head honchos of individual business units or divisions, like the VP of Marketing or the Director of R&D.
  2. Corporate strategy, being more high-level, is the domain of the CEO, the board of directors, and other top executives who have a say in the overall direction of the company.

Time Horizon

  1. Business strategies have a shorter time horizon, focusing on the next 1-5 years. It’s about figuring out how to gain a competitive edge and grow market share in the near to medium term.
  2. Corporate strategies take a longer view, looking 5-10 years or more into the future. It’s about positioning the company for long-term success and sustainability.

Resource Allocation

  1. Business strategies are all about how to allocate resources (people, money, technology) within a specific business unit to achieve its goals and objectives.
  2. Corporate strategy, in contrast, is about deciding how to allocate resources across different business units. It’s like being the parent who decides which kid gets a bigger allowance based on their needs and potential.

Competitive Advantage

  1. A key focus of business strategy is developing and sustaining a competitive advantage in a specific market. It’s about figuring out what your business does better than anyone else and leveraging that to win customers and market share.
  2. Corporate strategy, while also concerned with competitive advantage, takes a more portfolio approach. It’s about creating synergies and competitive advantages across multiple businesses or markets.

Risk Management

  1. Business strategies tend to be more focused on managing risks within a specific market or industry, like changes in customer preferences or new competitors entering the fray.
  2. Corporate strategy is about managing risks across the entire company. It’s about diversifying the company’s portfolio of businesses to mitigate risk and ensure long-term survival and growth.


  1. https://books.google.com.pk/books?hl=en&lr=&id=pechXoVRX4EC&oi=fnd&pg=PA52&dq=Difference+Between+Business+Strategy+and+Corporate+Strategy&ots=g87Dp15R2c&sig=twTLp51p5Qnm7ZNaBVP–Ex5_z0&redir_esc=y#v=onepage&q=Difference%20Between%20Business%20Strategy%20and%20Corporate%20Strategy&f=false
  2. https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.198