Sometimes we wonder, why are there companies that last over time and others don’t? We know that competition in the market is very difficult, which is why it is important to know the difference between ‘corporate strategy’ and ‘business strategy’.
The answer is related to the strategies that these companies implement ; hence the importance of market research in marketing strategy , among other things. Well, you need knowledge and experience to be competitive, even with large companies; also be constant with the objective that is sought.
So, the strategies have been a way of linking the proposed objective and those specific actions that we are going to implement to reach the required goal; this term was taken over time by the business area.
What is the definition of corporate strategy and what is its scope?
The corporate strategy has been the long-term purpose, objective or scope of the company . It stems from the decisions made by senior executives that may or may not have a positive effect on it.
Then answer to what do I want to achieve? What advantage will I get? What are the fundamental elements for a successful corporate strategy? Everything can be classified according to the area where the operational business strategy, managerial strategy, marketing strategy or business strategy will be executed.
Therefore, the scope has to do with the vision that the company has proposed , in which market will I be able to compete better, the area or territory where it intends to intervene, the form of each business unit and its objective; as well as its growth and the time it may take for its development, among others.
What is the definition of business strategy and its classes?
A business strategy has been the plan or the route that the senior staff of said company carried out, in order to be able to compete in a specific and particular section , guiding resources, marketing, type of clients, among others; that is to say, how you are going to obtain that advantage in the market.
We must take into account, set low prices in relation to its competitors , as well as develop a business marketing strategy plan . Achieving a balance between the advertising part and the manufacture of the product; The results will be reflected in the solid growth of the company. There are several kinds of business strategies:
- Growth strategy: It has to do with competitiveness, and refers to those actions to outperform the competition.
- The diversification strategy: As the word says, it is differentiating, varying activities or expanding for whatever reasons.
- Maintenance strategy: This has been highly criticized, because it is assumed that a business should not stagnate, rather, it should always go up and not stay in the same position.
- The reduction strategy: Taking into account economic circumstances, perhaps administrative, and even legal, they are forced to reduce their participation in volume or size , to continue their survival.
This is the difference between corporate strategy and business strategy
The most striking difference is the scope of each one . In corporate, all aspects of a company are dealt with by a directive; while in the business strategy, it concentrates on a concrete and specific part directed by autonomous managers. As for example, advertising on social networks .
The corporate ones are more durable and stable , they are practically unchanged, since they define how to achieve their mission, while the business ones tend to change frequently to adapt to the market that is presented to them; organizing the resources it has, distribution, among others.
Finally, we can conclude that both the corporate strategy and the business strategy, both must be present in any type of company, because they have a link or connection between both ; and as a consequence, for its future growth.
