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Corporate strategy vs Competitive strategy

Strategy and tactics are both incredibly important aspects of any organization, but for the most part, strategy plays a more significant role. A good strategy utilizes many tactics in order to meet its goal(s), which leads back to the old saying that: "A wise man makes his plan on the basis of his enemy's plans. He never makes his plan on the basis of his own preconceived notions." The importance of having a good strategy can be seen through this quote because if one is going up against a competitor, one needs to strategize well in order to stay ahead of them.

A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy concerns how to create a competitive advantage in each of the businesses in which a company competes. Corporate strategy concerns two different questions: how much influence does the corporation exercise over the business units and how does the corporation decide what businesses to keep or cut as time passes?

Corporate strategy vs Competitive strategy

Corporate strategy is the pattern used to win in the marketplace or industry. Competitive strategy is the pattern used to win in comparison with your direct competitors. Corporate strategy hinges on a company’s capabilities, strengths, and weaknesses in relation to market characteristics and its competitor. Competitive strategy relies largely upon the strategic position of a company within a given industry – by understanding its own place in that industry and how it compares to that of other companies.

Corporate strategy determines the overall direction of a company and its priorities. Corporate strategy adjusts the company to various markets and moves it towards different business goals. Corporate strategy is based on how well a particular enterprise copes with prevailing economic, political, social and cultural realities that determine its competitiveness in any given market. A well-thought-out corporate strategy will help greatly in achieving success by creating competitive advantages in the market or niche area targeted by the enterprise concerned.


Corporate strategies are designed and held by the parent company or corporate head office. Each business unit that needs to grow its own respective brand will have its own official business strategy, but ultimately it's up to where the organization is competing. This may include exploring different industries, markets, demographics and more in order to understand how the business unit can advertise the most effective means of promotion in this case the HOW on that particular unit competes.

Corporate strategy essentially ensures that the goals and vision of a company are carried out throughout its diverse operations. Business units have strategies as well, which are ways of carrying out the visions and long-term objectives of each particular business unit specifically. They determine how these objectives can be achieved.


Business and corporate-level strategies differ in their focus. A business strategy focuses on competing in the marketplace, while a corporate strategy focuses on the overall growth of the business to generate profits. Corporate strategies operate at a higher level than business strategies because they consider how an entire business will operate and maintain its competitive edge. Although managers are responsible for developing a strategy on all levels, including establishing business goals and objectives, they should also take into account the opinion of all employees by reaching out to each individual personally when forging company-wide goals in order to make sure everyone understands the “big picture” and feels as though he has been listened to and is motivated to accomplish organizational goals.

When the body of a company can't reach all areas of its internal and external environments to adapt appropriately, strategies are strategies that have been created to reach its goals. Sometimes these are long-term and can take years to implement, with the intent of maximizing profits, growth, stability – or whatever overall goal it was in instituting that strategy into the organizational structure in the first place. The leader of a company will be tasked with either establishing these strategies or going over them and making sure they're on track for completion, based on quarterly earnings reports for instance.


Business strategies are shorter-term compared to corporate strategies which are long-term. Managers use business strategies in order to solve complex issues and meet measurable objectives, such as gaining a certain amount of new customers or revenues for the quarter. These types of initiatives typically allow an organization to compete in certain sections of the market and can be implemented quickly in order to bring about immediate change.


The CEO of any company always has a plan. Whether they alone formulate it or they get help from their chief officers, the CEO comes up with the corporate strategy every company follows. Many companies also have officers who work at lower levels and specifically deal with corporate strategy as well. You can find out more about what one is in our article What a Chief Strategy Officer Is and Why You Need One. But no matter who does it, no business has any kind of corporate strategy without heading higher on down to the CEO, and the one way to know for sure where things are heading is by regularly communicating closely with your shareholders.

The company’s business strategy might lie with your business unit leader, or even perhaps with the CEO themselves. Under the department leaders and their management teams is where each main functional group within the company will develop their own plans of action towards achieving objectives and goals of what they're heavily involved in. These strategies will encompass their departments, whether it's Technology, Human Resources or even Finance.

Factors to Strategy formation

These are the considerations your brand will constantly ask itself. The answers should impact every aspect of every stage of your business:

- What are you going to be?

- How can we best help our customers with their problems? - How are we going to get there? - The industries chosen for diversification must be associated with strong growth rates.

People have to realize that everyone is capable of great things, as long as they use the resources available to them. Either the new unit must gain a competitive advantage from its link with the corporation or vice versa. Otherwise, entry costs could cannibalize future profits.


A business manager can use various different strategies to plan what steps they and their team need to take in order to be more successful and make the company profitable. They can assess the products, target audience and competition so that they can identify their competitive advantage. In addition, leaders may also want to gain a better understanding of their current business model and its strengths, opportunities, and areas for improvement. Managers should also determine the resources and steps required to be more competitive in the market.


The strategy is the part of the plan that will affect how a firm or business brand positions itself in the marketplace and whether it has an advantage over others. The strategies generally recommend short-term hints as to how business plans must be carried out. Strategy is concerned with positioning firm brands against competitors, in the marketplace.

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