What is the Difference Between Corporate Strategy and Business Strategy?

The main difference between corporate strategy and business strategy lies in their scope and focus. Here are the key distinctions between the two:

Corporate Strategy:

1. Concerned with the overall objective and scope of the business to fulfill stakeholders' expectations.
2. Focuses on the entire organization, including multiple business units or subsidiaries.
3. Aims to manage resources, risk, and return across the firm.
4. Typically looks at long-term goals and growth objectives for the next three to five years.
5. Involves strategy formation, management, and execution at the corporate level, with departmental or functional strategies beneath it.

Business Strategy:

1. Concerned with strategic decisions concerning the choice of product, competitive advantage, customer satisfaction, etc..
2. Focuses on a single area of the business or a specific business unit.
3. Aims to develop efficient ways to manage different business units to achieve strategic goals.
4. Monitors the industry environment to ensure that the company's strategies conform to the marketplace.
5. Is informed by and derived from the corporate strategy, with each business unit having its own strategy.

In summary, corporate strategy is about managing resources, risk, and return across the entire organization and focuses on long-term goals and growth objectives. On the other hand, business strategy is concerned with the strategic decisions within a specific business unit or area, aiming to achieve competitive advantages and manage resources efficiently within that unit.

Comparative Table: Corporate Strategy vs Business Strategy

Here is a table outlining the differences between corporate strategy and business strategy:

In summary, corporate strategy is concerned with the overall growth and profitability of the organization, while business strategy focuses on competing in the marketplace and achieving specific goals for a particular business unit or division. Corporate strategy is formulated by top-level management, while business strategy is framed by middle-level management.