Business vs. Corporate Strategy: What's The Difference?

Strategy truly is everyone’s job.

That’s been a recurring theme in our discussions of what it takes for a corporate (or organizational) strategic plan to come to fruition. Big things happen when everyone in your organization buys in and helps.

Much of that support comes from your department managers. Each of them should (among other things) write a tactical plan for their own business area that helps realize the larger strategy. This plan is referred to as a business strategy (vs. the higher-level corporate strategy).

Below we cover the main differences between corporate- and business-level strategy, and how to develop and execute them together.

Business Strategy Vs. Corporate Strategy

Here’s how we define corporate vs. business strategy:

Corporate Strategy:

Corporate strategy is an organization’s high-level plan of action, defining its intended direction and long-term goals for the next three to five years. A corporate strategy factors in the organization’s primary goals and growth objectives, how business units can add more value and contribute, and the timing/pace of growth.

Business Strategy (or Business Work Plans):

A business strategy, sometimes called a work plan or department business plan, is a yearlong plan of action for a specific department or business unit, outlining a specific subset of goals and activities in support of broader, high-level organizational goals. A business strategy is formed around the corporate strategy; when departments have a good idea where the organization is headed, they can determine their own objectives and related course of action.

Similarities And Differences Between Corporate And Business-level Strategy

Done right, corporate and business strategies depend on each other. They are similar in general format, reporting requirements, and importance to strategic success. They differ in their level of applicability, creator, timeframe, focus, and audience.

Think of it this way: business strategies spring from corporate strategy. But the success of the organization as a whole depends on the success of those business plans. If your business strategies succeed, and they are linked to your corporate strategy, your corporate strategy will succeed too.

Two Examples Of Corporate And Business Strategy

Example #1: A For-Profit Organization

Many for-profit organizations strive to increase profitability as part of their overall corporate strategy. To support this objective, they may allocate resources to projects that help increase sales and decrease costs. They may also review related metrics such as total revenue and fixed and variable costs. All this is tracked and monitored at the highest level of the organization.

When it’s time for the company’s marketing department to develop its business strategy, its department head must know the company’s overall strategic plan and determine actions the team can take that will drive its achievement.

Generating more high-quality leads, for example, is within the department’s purview and would contribute to the higher-level objective. The marketing department’s business plan may therefore include a goal to convert X% of website visitors into quality leads. To reach that goal, the department plans to:

• Track metrics like landing page conversion rates, Tier A demo requests, and the number of marketing-qualified leads that convert to sales-qualified leads.
• Complete department projects that serve the corporate goals, such as a design audit and revamp of the company’s website and landing pages, and SEO work.

If the marketing department succeeds in generating more high-quality leads for the sales team, that would likely translate to more sales and greater profitability for the company.

Example #2: A Local Government

As part of creating a desirable community, many local governments include a public safety objective in their overall strategic plan, such as providing safe neighborhoods and public gathering spaces. To that end, they may create metrics associated with improving citizen satisfaction and street lighting coverage, as well as projects to increase community involvement through new safety programs.

Again, all this is tracked and monitored at the highest level of the organization.

The police department plays a key role in public safety initiatives and should know the government’s high-level objective to create safe neighborhoods. To support that objective, the department’s business strategy could include goals to increase community safety and reduce crime. To reach those goals, it might, among other things:

• Develop an initiative to create (or expand) a Neighborhood Officer Program.
• Develop an initiative to expand the number of hired officers.
• Measure the number and types of calls for help over time.

Not every departmental project will directly affect corporate strategy, but every element of a business strategy should benefit the organization in some clear way.

Tips For Developing Effective Corporate And Business Strategies

1. Think about what is important for your organization or department

At the corporate level, consider your organization’s mission and vision. This clarifies where the company is headed so you can start to see a path forward. Ask questions like these: Why does our organization exist? What problem are we working to solve? Where are we headed in the future? Where should resources be allocated to position us for success?

At the business (departmental) level, review the overall corporate strategic plan and be sure you understand how progress will be tracked and measured. Then consider your department’s capabilities relative to the overall strategic objectives, and where your team can contribute most.

2. Conduct research and perform analyses

To solidify your strategy ideas, take a hard look at your company and the current external environment with SWOT and PEST analyses. Use the results as you plot your strategy.

3. Define your metrics and initiatives

Once you’ve clarified your goals, define measurements to track progress and identify the key projects that will help you reach them.

4. Involve the right parties when forming the strategy

At the corporate level, high-level executives should be involved from the beginning. Without their buy-in, your strategic plan has no chance of succeeding. If you’re a department head, you are responsible for creating your business strategy, but you may need to consult team members on certain aspects of the plan (for example, timing or metrics). Review the proposed strategy with higher-ups to make sure everyone is in sync.

5. Use strategy software like ClearPoint in place to track progress

If you don’t track progress, you can’t see where you’re succeeding and where you’re falling short. Strategy reporting software works for both corporate and business strategy. It shows how every element of your strategy is going and how performance affects other areas.

See how ClearPoint would run your plan — book a demo

Manage Your Corporate And Business Strategies With ClearPoint Strategy Software

There’s no shortage of strategy software, but it helps to use one tool for both corporate and business strategy. One tool means one data set for reporting and analysis, which cuts the work. It also lets everyone see the linkages between corporate and departmental goals and track progress on everything.

In ClearPoint you can:

• Connect elements of business strategy to corporate strategy goals. You’ll visualize the hierarchy from the corporate level down to each department’s work plan.
• Track corporate- and business-level strategy performance. Quickly view important metrics and track important projects.
• Visualize your performance. Create high-level snapshots that give an overview of your progress, or get granular with performance details, like the individual milestones that exist within a single project on a business work plan.
• Customize your tracking and reporting. ClearPoint offers a customized approach to accommodate different departmental reporting styles, structures, and information.
• Effortlessly gather progress updates. Say goodbye to emailing Excel files; ClearPoint automatically pulls data from any and all of your relevant sources.
• Set the appropriate user permissions. Permissions may vary for business-level strategy vs. corporate-level strategy; you can set them however you like for viewing or editing in ClearPoint.
• Maintain your corporate strategy and business work plans in one secure, cloud-based system.

ClearPoint can do a lot more to help you reach your goals, and we’d love to show you. Reach out today to set up a demo.