Business Strategy vs Corporate Strategy: 6 Differences

19 October 2022 by Shweta Jhajharia

We previously took a look at what a corporate strategy is and how to create one for your business in our Complete Guide To Planning a Corporate Strategy. Within this topic, it was key to distinguish the differences between a corporate strategy and a business strategy. So important, in fact, that we thought we should go into some more detail on the subject.

So, in this handy guide, we’ll give you the full lowdown on business strategy vs corporate strategy, including 6 key differences between the two. By the end, you’ll be able to decide which strategy is best for your business goals.

Business Strategy vs Corporate Strategy Basics

First of all we’ll take a look at what both a corporate strategy and a business strategy are. 

It’s also important to remember to review your strategies regularly, as both your business goals and the corporate marketplace will change over time. What works today may not work tomorrow, so it’s important to be flexible and adaptable in your approach.

What is a Business Strategy?

Business strategy focuses on how different business units can best achieve their own objectives. It’s about how you execute your plans to reach your goals. Business strategy looks at the big picture provided by the corporate strategy and asks the question: “What specifics do we need to do to achieve our desired outcome?”

A business level strategy is a shorter-term strategy aimed at improving overall competitive advantage and expanding market share. At the business unit level, strategies are frequently tailored to fit the division’s or department’s unique goal, and team leaders, department heads, and their management teams will be in charge of putting them into action.

A competitive business strategy allows you to gain a better understanding of your competitors and the marketplace, determine the best way to allocate your resources and create a plan for how you’ll respond to changes in the marketplace.

What is a Corporate Strategy?

Corporate strategy focuses on the long-term goals of the entire company. It’s about where you want your business to be in the future and how you’re going to get there. Corporate strategy provides the framework within which business strategies operate.

A corporate level strategy is a top-level strategic plan that takes a bird’s eye view of an organization’s goals and focuses. A corporate level strategy can also be passed down by a parent company, with many corporate strategies affecting the entire organization, but it’s important to note that a corporate strategy is not always handed down, as many businesses will develop their own.

Corporate strategy is about making decisions that will impact the long-term profitability, stability and direction of your business. It’s the driving force behind your business success.

6 Key Differences Between a Corporate and Business Strategy

  • Long-term strategy vs short-term strategy 

One key difference between the two is that business level strategies are shorter-term. They’re about how you’re going to achieve your objectives in the near future. Corporate level strategies are long-term, often all about the future vision of the company.

By understanding the difference between long-term and short-term strategies, you can start to see how the two work together. The corporate strategy provides the overall direction for the company, while business strategies are focused on how your shorter term objectives will be achieved.

  • Profitability/stability vs competitive advantage/market share

One main difference between a corporate strategy and business strategy is that a business strategy is all about how you can improve your competitive advantage and expand your market share. A corporate strategy, on the other hand, is more focused on building sustainable profitability and stability.

By developing a corporate strategy that’s focused on profitability and stability, you can ensure that your business is able to weather any storms that come its way. A business strategy, on the other hand, is all about how you can grow your company by taking market share from your competitors.

  • Mission for entire company vs division/department level mission

An overall corporate strategy is a mission for the entire organization, whereas a business strategy is a mission statement for a particular business unit. By having a business strategy, it ensures that each division or department is working towards the same top-level goal.

In this way, you can see how a corporate strategy and business strategy work together. The corporate strategy defines a corporate-wide mission that everyone in the company should be working towards. The business strategy then outlines how each division or department can contribute to that overall mission.

  • Decisions vs actions

Another key difference between the two is that corporate strategies are more about decision making while business strategies are more action-oriented. This means that a corporate strategy will often be focused on high-level decisions such as where to allocate resources or what new products or services to develop. A business strategy, on the other hand, will be focused on the day-to-day actions that need to be taken in order to achieve the company’s objectives.

This distinction is important to keep in mind as it can help you better understand the role of each type of strategy. A corporate strategy should be about key decisions that will shape the direction of the company, while a business strategy should be about the actions that need to be taken on a daily basis to make those decisions a reality.

  • CEO, Board, CSO vs business unit leaders, department heads & teams

The corporate strategy is typically set by the CEO, Board or CSO, while business strategies are created and executed by business unit leaders, department heads and their teams. This is also often who is responsible for putting the strategy into action.

This difference is important to note as it shows who is responsible for setting the overall direction of the company versus who is responsible for carrying out the day-to-day operations that will make it possible.

  • Diversification strategies vs cost leadership/focus and differentiation strategies

A final key difference is that corporate strategies often involve diversification or mergers and acquisitions while business strategies are usually either cost leadership or focus and differentiation. 

The corporate strategy will be about how the company plans to grow and expand, while business strategies like cost leadership, cost focus and differentiation strategies are about how the company plans to compete in its chosen market.

These different types of growth strategies can have a big impact on the overall direction of the company. By creating a cross-department unification strategy, you can avoid any siloing that could happen if each business unit went off in its own direction.


Corporate Strategy vs Business Strategy: Key Differences Chart

Corporate strategy Business strategy
Long-term strategy Short-term strategy
Drives profitability & long-term stability Improving competitive advantage and market share
Mission & vision for entire company Division/department level mission
Decisions Actions
CEO, Board, CSO Business unit leaders, department heads & teams
Diversification strategies, mergers & acquisitions Cost leadership, cost focus and differentiation strategies

Need Support With Your Corporate and Business Strategies?

At Growth Idea, our business strategy consultants can help you develop the right corporate and business strategies for your construction based company. We’ll work closely with you to understand your company’s strengths and weaknesses and develop a plan that will help you achieve your goals.

By working with expert consultants, you can be sure that your company is making the right decisions to grow and succeed, no matter what the market conditions may be.

Book a free strategy review today to learn more about how we can help you grow your business.

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Shweta Jhajharia

Shweta Jhajharia is one of the leading authorities on Business Value Building and the creator of the unique 6M Model. Shweta is widely respected as an impactful, intelligent and results orientated professional who helps business leaders unleash their potential to reach meaningful, higher objectives. This realisation of potential and maximisation... Read more