Q&A - Explain the role of corporate objectives in business strategy

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Corporate strategies are essentially about what the business wants to achieve.  Business strategy is the gameplan for how those corporate objectives are to be achieved.

Business strategy is concerned with deciding what markets and activities the business should be involved in; where it wants to be; and how it is going to get there.  Strategy is about making high-level decisions and forms the management game plan for:

• Satisfying customers
• Running the business
• Beating the competition
• Achieving corporate objectives

Corporate (or business) objectives are set at the high level and are quite distinct from any more detailed functional objectives set for the functional areas of a business.

Examples of corporate objectives would include:

• Profit (value, margin)
• Return on investment (ROCE)
• Growth (profit, earnings per share)
• Market share
• Cash flow
• Sales revenue
• Shareholder value
• Corporate image & reputation

Many factors will influence the corporate objectives that are set.  Precisely which factors depends on the nature of the business and its markets.  Some examples of those factors include:

Corporate objectives can also be considered the main or primary objectives of a business. The set the agenda for the secondary objectives:

A similar distinction can also be made between strategic (corporate) and tactical (functional) objectives:

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