Which statement best describes corporate strategy vs business strategy?

Which statement best describes corporate strategy vs business strategy?

• A. Corporate strategy decides how to compete in a specific market.
• B. Corporate strategy decides what industries to be in; business strategy focuses on marketing tactics.
• C. Corporate strategy focuses on product design and HR policies.
• D. Corporate strategy decides what industries/businesses to be in; business strategy how to compete in a specific market.

Answer: (D)

The main idea here is that strategy operates at two levels: where to compete and how to compete. Corporate strategy sets the scope of the firm—deciding which industries or businesses to be in and how to allocate resources among them, including questions of diversification, acquisitions, or exits. Business strategy then takes a given market or product line and answers how to compete there—defining positioning, the value proposition, and the competitive moves that win against rivals. That’s why the correct statement fits best: corporate strategy determines the industries or businesses the company will operate in, while business strategy outlines how to compete in a specific market. For example, a company might choose to include healthcare devices and consumer electronics in its portfolio (corporate level). Within each of those areas, it then crafts distinct plans to win in those markets—pricing, features, quality, distribution, and operations (business level). The other descriptions mix up these roles: deciding how to compete in a market is a business strategy task, not corporate; focusing only on marketing tactics leaves out broader competitive choices like operations and differentiation; and product design or HR policies are internal functions, not the strategic scope question that corporate strategy addresses.

The main idea here is that strategy operates at two levels: where to compete and how to compete. Corporate strategy sets the scope of the firm—deciding which industries or businesses to be in and how to allocate resources among them, including questions of diversification, acquisitions, or exits. Business strategy then takes a given market or product line and answers how to compete there—defining positioning, the value proposition, and the competitive moves that win against rivals.

That’s why the correct statement fits best: corporate strategy determines the industries or businesses the company will operate in, while business strategy outlines how to compete in a specific market. For example, a company might choose to include healthcare devices and consumer electronics in its portfolio (corporate level). Within each of those areas, it then crafts distinct plans to win in those markets—pricing, features, quality, distribution, and operations (business level).

The other descriptions mix up these roles: deciding how to compete in a market is a business strategy task, not corporate; focusing only on marketing tactics leaves out broader competitive choices like operations and differentiation; and product design or HR policies are internal functions, not the strategic scope question that corporate strategy addresses.