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

RJ Messineo

February 20, 2023

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—especially the need to get the buy-in and help of everyone in your organization to make big things happen. A key component of that support comes from your department managers, each of whom should (among other things) come up with a tactical plan for their own business area that will enable the realization of the larger strategy. This plan is referred to as a business strategy (vs. the higher-level corporate strategy).

So what are the main differences between corporate- and business-level strategy, and what’s the best way to develop and execute them in concert? We’ll answer those questions here.

Business Strategy Vs. Corporate Strategy: Definitions

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 are strongly related and interdependent. While they are similar in terms of their general format, reporting requirements, and vital importance to strategic success, they differ with regard to their level of applicability, creator, timeframe, focus, and audience.

Corporate Strategy		Business Strategy
High-level, applying to the organization as a whole	LEVEL	Lower-level, applying to an individual department or business unit
Formed by a strategic planner in conjunction with board members or leadership, along with representatives from finance, human resources, operations, sales, and any other critical functions	CREATOR	Formed by mid-level department heads, and potentially, if it’s a small organization, employees
Long-term, usually three to five years; unlikely to see major changes over time	TIMEFRAME	One to two years; few drastic changes, but it may be revised periodically
Creating value for the organization as a whole	FOCUS	Department-specific initiatives in support of the organizational strategic plan
Primarily guides the decisions of high-level executives	AUDIENCE	Primarily guides the decisions and day-to-day activities of department heads and employees
It is strategic in nature and contains objectives, measures, and initiatives	FORMAT	It is strategic in nature and contains objectives, measures, and initiatives
It requires tracking and reporting	REPORTING	It requires tracking and reporting
It is vital to the success of an organization	IMPORTANCE	It is vital to the success of an organization

Think of it this way: Business strategies spring from and are informed by corporate strategy. Corporate strategy informs business strategies. Ultimately, however, the success of the organization as a whole depends on the success of those business plans. If your business strategies are successful—and they are linked to your corporate strategy—then your corporate strategy will be successful, 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 and engage in projects that will help increase sales and decrease costs. Concurrently, they may 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 an activity within the department’s purview that would contribute to meeting 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 will impact the corporate goals, such as doing a design audit and revamping of the company’s website and landing pages, and implementing SEO optimization strategies.

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 incorporate a public safety objective—such as providing safe neighborhoods and public gathering spaces—into their overall strategic plan. In that interest, 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 be well aware of 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.

It’s important to note that not every departmental project will have a direct impact on 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 will help clarify where the company is headed so you can begin to envision a path forward. As part of that exercise, consider the answers to some of these weighty questions: 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. In what ways can your team best contribute in those areas?

‍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. Take the results into consideration as you plot your strategy.

‍3. Define your metrics and initiatives.

‍Once you’ve clarified your goals, you’ll also need to define measurements to track progress and consider key projects that will lead to success in those goals.

‍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, however you may need to consult team members with regard to certain aspects of the plan (for example, timing or metrics). Additionally, be sure to review the proposed strategy with higher-ups to make sure everyone is in sync.

‍5. Put a system like ClearPoint in place to track progress.

‍Forming a strategy is great, but if you don’t track progress you’ll have no way to see where you’re succeeding and where you’re falling short. Strategy reporting software works for both corporate and business strategy, making it easier to evaluate how every element of your strategy is going and how performance is impacting other areas.

Manage Your Corporate And Business Strategies With ClearPoint

There’s no shortage of strategy software available, but it’s helpful if you can use the same tool for both corporate and business strategy management. Using the same tool for both activities reduces the work involved because it uses a single data set for reporting and analysis; it also makes it easy for everyone to see the linkages between corporate and departmental goals, and to 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.