What Is the Difference Between Organizational Strategy and Business Strategy?
March 30, 2023
Organizational strategy and business strategy are two powerful business tools that can help your company achieve sustainable, systemic success – if you can avoid confusing the two!
Understanding the difference between these two strategies and how they can work together to help your organization achieve its goals is a prerequisite for steady, sustainable success.
In this blog, we’ll dive into the differences between organizational strategy and business strategy, explore the importance of each in achieving long-term success, and provide examples of how these two strategies can work together to help your organization reach new heights.
Whether you’re a startup, a small business, or a large corporation, this guide will provide you with the insights and knowledge you need to develop effective business and organizational strategies that maximize growth, revenue, and profitability. So, let’s dive in and explore the world of organizational and business strategies!
Organizational Strategy vs. Business Strategy
As we mentioned above, understanding the difference between organizational and business strategy can put your company on the fast track to long-term success. Let’s break down the identifying features and key differences of both of these essential strategy styles together.
Organizational Strategy
Organizational strategy refers to overarching plans that provide direction for an entire organization.
These strategies outline how an organization will allocate resources, build a competitive advantage, and align the efforts of every member of their team toward your organization’s newly identified common goal.
Think of organizational strategy as a “big picture” guide or roadmap toward three, five, and even ten-year goals.
Organizational strategy provides an essential outline for every aspect of operations – from setting long-term goals and identifying the resources needed to accomplish them to pursuing growth opportunities and responding to unexpected market conditions.
Business Strategy
Business strategy refers to the high-level, action-oriented strategies organizations leverage to transform the goals of organizational strategies from concepts to realities. Business strategies are often designed to support specific competitive goals like:
- Breaking into new markets
- Launching new products or services
- Targeting a new consumer demographic
- Acquiring/merging with a competitor to gain an advantage over the remaining market
Compared to organizational strategy, business strategy is far more focused, actionable, and measurable in the short and medium terms. Instead of prioritizing where an organization is headed, business strategy emphasizes how it can reach its overarching goals through competitive market advantages.
What Is the Purpose of Strategy in an Organization?
Businesses operating under the clear-eyed guidance of organizational or business strategies that align with their company culture, reinforce their structure, uplift their values, and support their long-term vision often enjoy consistent year-over-year growth.
Meanwhile, their competitors struggle to maintain market share and keep customers engaged.
So, what gives?
The fact is, without clear and communicable frameworks for tackling tough tasks like decision-making, resource allocation, investment decisions, and pursuing growth opportunities, businesses struggle to consistently operate as a cohesive entity pursuing a single (or series) of shared goals.
Organizational strategy solves this issue by clearly outlining your company’s goals, mission, and values. Business strategy takes this direction a step further by providing insight into the essential tasks, roles, and responsibilities that will need to be satisfied to bring said goals and visions into reality.
Organizational and business strategy also makes allocating company assets – like funds, technology, and human capital – simple, streamlined, and systemic. Every team member in your organization will be keenly aware of the individual – but indispensable – role each of them plays in the long-term growth and profitability of your company.
Finally, organizational and business strategies provide data-driven responses to unexpected or unfavorable events like market upheavals, sudden shifts in consumer behavior, and similar circumstances. Without a tried-and-true decision-making framework (like those provided by organizational and business strategy), companies often find themselves struggling to respond to shifting conditions in a manner that supports their long-term goals.
Plan for the Future with Medallion Partners
At Medallion Partners, we know trying to construct the right organizational strategy for your business can be challenging. There are so many things to consider that it can be difficult to see the forest through the trees — especially if you aren’t accustomed to strategic planning. That’s where we come in.
With years of experience and a keen mind for strategy and planning, when you work with Medallion Partners, you can feel confident that your organization will be set up for long-term success. Our unique approach to organizational strategy consulting creates a custom plan for your organization that helps you to future-proof the company for years to come.