Explain the differences between corporate level and business level strategies

Question 1

Explain the differences between corporate level and business level strategies

Answer 1

Business level strategy is used to obtain a customer base and sell a product at a profit. Corporate level strategy, on the other hand is used when deciding what business units to sell and purchase and how to integrate operations and find synergies between them.

Question 2

Corporate- level strategy

Answer 2

Managers must coordinate the activities of multiple business units and in the case of conglomerates, even separate legal business entities. Decisions about

• Scope
• Resource deployment (across divisions or business)

Are the primary focus of corporate strategy

Question 3

Corporate- level strategy

EXAMPLE

Answer 3

IMB: Managers decided to pursue future growth primarily through the development of consulting services and software RATHER than computer hardware – they shifted corporate resources (research and development expenditure, marketing, advertising budget and customer service personnel) INTO the companies service and software business. TO SUPPORT NEW STRATEGIC DIRECTION

Question 4

Corporate- level strategy

GOALS

Answer 4

• Generate superior human, financial and technological resources
• Designing effective organizational structures and processes
• Seeking synergy among firms various businesses. Synergy can provide a major competitive advantage when businesses share R&D, production or production technologies

Question 5

Business- level strategy

Answer 5

o Finding a sustainable competitive advantage (how many and which market segments to compete in, breadth of production offerings and marketing programs appeal to these segments)

o Define appropriate scope

o Synergy across product markets and departments

Question 6

Business- level strategy

EXAMPLE

Answer 6

A business with a strong marketing department and a competent salesforce may compete by offering superior customer services