Understanding Business vs. Corporate Strategy

Having the right strategy can position you for growth. When you are managing a single business or considering expanding into multiple industries, your strategy should be clear.

At the business level, competition comes from companies that affect the prices or costs within a specific industry. For instance, brand like Innoson Motors. The competition for Innoson in the auto industry includes other car manufacturers like Toyota or Honda. Similarly, in the tech space, companies like Konga face competition from e-commerce giants like Jumia. Here, each business segment has its own set of competitors that directly affect pricing, customer acquisition, and market share.

Now, at the corporate level, competition shifts focus. Instead of worrying about individual competitors, the goal becomes about managing a portfolio of businesses. Nigerian conglomerate like Dangote Group. The competition for Dangote at this level isn't just about beating other cement producers or sugar companies. It’s about competing with other multi-business corporations, private equity investors, and even mutual fund managers who assemble portfolios of businesses across industries. For example, Dangote Group must compete with firms like BUA Group, not just in specific sectors, but in how they combine their diverse business interests into a winning corporate strategy.

This brings us to two ways corporate strategists compete: selection and modification.

1. Selection: This is about choosing which businesses to invest in or acquire, similar to how UACN diversified into various sectors like food, logistics, and real estate. Selecting the right businesses can provide a competitive edge, especially if you can identify companies with growth potential or undervalued assets that others might overlook.
2. Modification: Once you have a portfolio of businesses, the next challenge is making them work better together. A good example is Nigerian Breweries, which over the years has acquired other beverage companies and expanded its product offerings. The goal here is to ensure that these businesses complement each other, sharing resources, expertise, and even customer bases to maximize profitability.

In inefficient markets where capital is scarce, simply selecting undervalued businesses might give a corporate strategist an advantage. But in more developed markets, like what we’re seeing with the rise of tech startups in Nigeria, you’ll need more than selection. You’ll need to focus on modifying and improving your businesses to stay competitive, especially when competing with private equity firms or mutual fund managers that are also trying to assemble portfolios.

Strategy is key to success in business, you are managing a single company or overseeing multiple businesses, but have you ever wondered how business strategy differs from corporate strategy?.

At the business level, focus on beating your direct competitors. But if you’re thinking bigger managing or investing in multiple businesses start considering the broader corporate strategy

UTTER SALES NEWSLETTER

UTTER SALES TEAM

EDITOR:FOLASHADE OLAJOBI