The differences between corporate level strategy and business level strategy are noteworthy as each influences the performance of an organisation. There are three commonly recognised levels of strategy within any corporation. The main identifier of each level is its sphere of influence within the organisation. While the three levels are interrelated in many ways, each must be separately considered to achieve the peak performance levels of which the business is capable.
Strategic planning initiatives are generally developed in a top-down model, where strategic goals begin as abstract concepts at the corporate level before being disseminated downward through business and operational levels for implementation. It is important to understand the differences between each level of strategy to ensure leaders are engaged in the appropriate activities at the appropriate levels. Using this three-level model, strategies are formed and brought into alignment to achieve an overall goal. This alignment is essential to the performance of the organisation as a whole.
At the corporate level, strategies are generally developed with the intent to align business practices with the organisation's mission statement. The mission statement is a document of why the organisation is in business, how it will do business and for what reasons. Corporate level strategies influence the entire organisation. The main focus of leaders at the corporate level is to enhance stakeholder value by developing the organisation in accordance with its mission statement.
The main priority of business level strategies is to develop a sustainable competitive advantage. Leaders at the business level are primarily concerned with building and maintaining superior positioning within the industry in which the organisation does business. Pricing and product differentiation are common features of business level strategies. For example, strategies must be implemented to provide value to consumers at an accessible price. Business level strategies are also concerned with creating a recognisable brand and marketing individual products.
Operational level strategy, also commonly referred to as functional level strategy, is a third level of strategy which must be considered to fully understand the difference between corporate level strategy and business level strategy. Operational level strategies are developed to implement strategic decisions made at the corporate and business levels. This is commonly achieved through the identification and development of the organisation's core competencies, which are the means by which the organisation may achieve individual competitive advantage.