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Which strategy – business-level or corporate-level strategy should a firm develop first? Describe the relationship between a firm’s business- and corporate-level strategies.
What is Both must be developed together, at the same time. Decisions made at the corporate level, such as to increase or decrease diversification, will then require changes in the firm’s business-level strategy. Decisions made at the business level, for example to pursue a differentiation strategy, will require changes at the corporate-level also. Most firms that are being just founded have only a single business and in those firms, the business-level strategy will be developed first. However, for a diversified firm, corporate and business strategies are formulated and implemented simultaneously.