Individual assignment

Trần Bình Minh­EBBA 10.3­11183380

Individual assignment
Topic:   Base   on   your   understanding,   write   an   essay   about   the   similarities   and  
differences   between   business   level   strategy   and   corporate   level   strategy.   Give  
some suitable examples to illustrate.
I, Definition 
Business level strategy is an integrated and coordinated set of commitments 
and   actions   the   firm   uses   to   gain   a   competitive   advantage   by   exploiting   core 
competencies   in   specific   product   markets.   It   deals   with   strategic   decisions 
concerning the choice of product, competitive advantage, customer satisfaction, 
etc.   Normally,   to   set   out   a   business­level   strategy,   manager   need   to   answer   3 
question 
1. Who: Determine the customer serve
2. What: Determine what customer to satisfy
3. How: Determining core competencies to Satisfy Customer need 
On   the   contrary,  Corporate   level   strategy  (Companywide)   is   concerned 
with   the   overall   objective   and   scope   of   business   to   fulfil   stakeholder’s 
expectations. They are specified actions taken by the firm to gain a competitive 
advantage by selecting and managing a group of different businesses competing in 
different product markets. The questions below are the main concerns of a manager 
when he/she have to draw out a corporate­level strategy.
1. The degree to which the businesses in the portfolio are worth more under the 
management of the firm that they would be under other ownership?
2. What businesses should the firm be involved in?
3. How should the corporate office manage the group of businesses?
II, Similarity
Regarding   the   similarities.   There   are   two   major   similarities.   First,   both 
strategies aim is to maximize the profit of shareholders by create more value, bring 

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about   more   consumers.   Second,   these   strategies   both   have   an   effect   on   the 
structure of how a company operate. For example, in business­level strategy, to 
secure the most profitable gain while incurring the lowest cost, a firm must tailor 
its operating system to achieve efficiency while in corporate­level strategy, they 
need to construct their business portfolios properly, building them in a way that 
they could work closely to share information, technology, knowledge so that they 
reach the economies of scope thus minimize the cost and risk.
III. Difference
Criteria
Purpose

Business­level strategy 
Business­level strategy sole 
purpose is to strengthen the 
overall performance of the 
enterprise.

Corporate­level strategy
Corporate­level strategy is mentioned 
the mission statement, which explains 
the business type and ultimate goal of 
the firm.

Created by Middle level management

Top level management

Scale 

Specific decision on executive 
,governing business units or 
divisions

Decision that dictate the direction of 
the business as a whole organization

Term

Short term strategy

Long term strategy

Focus

Competing successfully in the 
marketplace.

Maximizing profitability and business 
growth.

Approach Focus on internal forces within  Developed in response to external 
the firm. 
environments.
Major 
strategies

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(Focus) cost leadership

Expansion 

(Focus) differentiation

Stability 

Integrated cost 
leadership/differentiation

Retrenchment


IV. Example 
Business­level strategy: A gourmet candy company decide that it cannot compete 
on price since larger corporations often enjoy economies of scale that drive costs 
low.   So  instead   of   competing   directly   with   them,   it  would   choose   to   follow   a 
differentiation   strategy,   emphasizing   on   freshness,   quality   ingredients   or   some 
other attributes that consumers will value them highly enough to pay extra. As a 
result, the change in business strategy will affect its functional decisions such as 
the selection of its promotions and distribution channels.
Corporate­level strategy: The owner of the above business determine to diversify 
her business into raisin producing. She believe her mail­order candy distribution 
system can be perfectly used for the dried­fruit business and that the company’s 
existing customer might purchase items from both companies.

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