Read ten blogs and you’ll probably get ten different answers!
It’s not an esoteric or abstract exercise (or at least it shouldn’t be). Defining it helps companies focus, allocate resources and perform. If there isn’t a clear understanding at the leadership level, there will be a disjointed and in some cases dysfunctional organisation.
So here goes – corporate strategy is how the overall organisational entity achieves it corporate objectives (sales, profit, market share etc.) through the following choices:
- Which industries to compete in and how (market development, product development, diversification)
- Which capabilities should be focused on
- What is the competitive strategy (differentiation, price etc.) and what it built on – better distributor relationships, supply chain control, NPD function etc.
- How will it be executed (organic, acquisition, merger etc.)
So what about HR, Finance, Operations, Business Systems, Quality etc.? Well, they are corporate tactics. Essential building blocks to achieve the strategy – in fact bound together by it when done well.
Another common question that still crops up with clients is what’s the difference between corporate and business strategy.
It all depends on your focus. If you are looking at the overall organisation or company its corporate strategy, if it’s a unit selling products to markets it’s business strategy, and if its products to market segments, it’s marketing strategy.
See more on: Corporate Strategy