There is a subtle difference between corporate strategy and business strategy. Corporate strategy deals with questions related to markets and industries in which the company competes.
It answers the question –
Where do we want to compete?
Business Strategy is about –
How do we want to compete?
Usually, a company’s top management team, CEO and board of directors would be the one that decides where the firm will compete. They handle the corporate strategy.
Top managers decide on major issues like,
- Vertical integration
- Diversification
- Mergers and acquisitions
- Capital intensive investments
- Allocation of resources between the different units of a company
They approve new product and service lines that could be added to the company’s existing product offering. These are the important decisions shaping the future and a part of a firm’s corporate strategy.
Business Strategy is all about,
- How a company competes within the chosen markets and industries
- Gaining a competitive advantage over other firms makes a business successful
That is why this strategy is also called a competitive strategy. Depending on a company’s organizational structure, business strategy will be implemented by business unit managers or division heads.
