Business Strategy vs Corporate Strategy: What’s the Difference?
Posted: Oct 21, 2019
Summary: discover the differences between corporate strategy and business strategy.
Today we are going to talk about the differences between business strategy and corporate strategy.Corporate Strategy
We all know corporations are these big and powerful groups, right? But groups of what? Typically, a corporation is a group of businesses that are all owned by one individual or parent company. These businesses usually have something in common, or complement each other in some way. For instance, if you were a major ice cream company, it would be in your interest to own beneficial businesses, like a chocolate import business, a dairy farm, a transport company and perhaps a refrigeration company. Make’s sense, right? It’s easy to see how all of these businesses would benefit the parent company and add value to the primary product. The strategy is in knowing which companies would be of the greatest benefit to own, and which ones are better to simply have as contractors.
But corporate strategy is also in managing all of these individual businesses. You need to make important decisions about how your corporation will be organized. Will your head office be in one central location with important reports flowing back and forth from each business you own? Or will you have a representative of your head office, with authority, embedded on site at each business? This is called centralizing or decentralizing the command structure.
Corporate strategy is also about managing your people, as much as it is about managing your revenues. You must know where and when to invest your money – and into what. But you also need to know where and when to invest your people. Who will be the best fit for which job, are there redundant jobs? Are the right people in the right jobs or do changes need to be made?Business Strategy
Business strategy focuses on an individual business, within or without a corporation. All of those separate businesses need to remain competitive and effective. They need strategy for their individual fields to ensure they remain profitable. Outside of a corporation business strategy is every choice an owner makes to keep their business afloat, cutting-edge, and competitive.
Allocating capital and choosing the right employees are also aspects of business strategy.Main Difference
The main difference between business and corporate strategy is scale. Corporate strategy is accounting for multiple businesses in multiple sectors (and in multiple locations), while business strategy is just focusing on one business. Business strategy exists inside of corporate strategy, but for individual businesses, corporate strategy is not a factor. It’s the difference between "How should I compete?" and "How can WE compete?"
The great thing about being an individual business is that you aren’t limited by a corporation. A corporation is going to have its own objectives and each business it adds to its portfolio must also meet those objects in some way. As a solo business you have your independence of mission, but also for growth. You could develop into an entirely new business, add new services to your business and source materials from anyone you like without worrying about conflicts for a corporation.
Corporations do offer stability, oversight and major resources to a business, but deciding to merge or be acquired by a corporation is definitely something to think long and hard about. Is joining a corporation smart business strategy for you, or just good corporate strategy for them? It can be both!
Learn more and get help with your corporate or business strategy with the help from management consultants in Toronto.
Hi! I'm Stevie, and I'm interested in everything that surrounds the topic of personal finance. I hope my articles will be of some use to my readers!