The strategy that a firm should develop first depends on factors, including its industry, competitive landscape, market dynamics, internal capabilities, and organizational goals.

There are generally two broad types of strategies that firms often prioritize…

1. Corporate Strategy – Corporate strategy focuses on the overall direction and scope of the firm as a whole. It involves decisions related to diversification, growth, resource allocation, and portfolio management. Corporate strategy defines the firm’s vision, mission, and long-term objectives, as well as its approach to managing multiple business units or operating in multiple markets.

• When to Prioritize – Firms may prioritize developing a corporate strategy first when they are undergoing significant changes, such as mergers and acquisitions, restructuring, or entering new markets. Corporate strategy provides the overarching framework that guides subsequent business-level and functional-level strategies.

2. Business-Level Strategy – Business-level strategy focuses on how a firm competes within a specific industry or market segment to achieve a sustainable competitive advantage. It involves decisions related to positioning, differentiation, pricing, and value creation. Business-level strategy defines how the firm will create value for customers and generate revenue in its chosen markets.

• When to Prioritize – Firms may prioritize developing a business-level strategy first when they are seeking to address specific market opportunities or challenges, such as launching new products or services, entering new geographic markets, or responding to competitive threats. Business-level strategy provides the foundation for developing functional-level strategies in areas such as marketing, operations, and finance.

In practice, firms often develop both corporate and business-level strategies concurrently, as these strategies are closely interconnected and mutually reinforcing. For example, decisions made at the corporate level about portfolio diversification or resource allocation may influence business-level strategies, while business-level strategies may inform corporate decisions about growth initiatives or resource allocation priorities.

The specific strategy that a firm should develop first depends on its unique circumstances, strategic objectives, and competitive context. It is necessary for firms to carefully assess their internal and external environment, identify strategic priorities, and develop a coherent and integrated strategy that aligns with their long-term vision and goals.