There have been a number of articles and posts that maintain a company’s business strategy and its marketing strategy are one and the same. Although they certainly have a number of things in common, each addresses different issues a company faces in a competitive market. As such, I believe assuming such equivalence is a mistake that has the potential for weakening a company’s competitive position by causing conflict about where responsibility lies for business-level, market-facing decisions.
First, what IS a Strategy?
To clarify the contrast, let’s start with a great definition that helps separate the idea of a strategy from all other business concepts (which are all too often mistakenly called ‘strategies’):
“A strategy is a way through a difficulty, an approach
to overcoming an obstacle, a response to a challenge.”
Rumelt, Richard. Good Strategy, Bad Strategy:
The Difference and Why it Matters, 2011
The first thing to notice is that the terms ‘way’, ‘approach’ and ‘response’ imply that a strategy is made up of multiple elements, not just a single decision, activity or goal (which is most often they way it is applied). But most importantly for our purposes, it is obvious that in order to create an effective strategy, the obstacle or challenge to be overcome must first be clearly defined.
Strategy in Business
The concept of strategy entered the business world in the 1960’s as a means for understanding why and how some businesses become very successful while others fail to do so. Its subsequent development has allowed leaders in the field to effectively answer this question by identifying which elements of a company’s makeup (its structure, operations, offerings, policies, activities, systems, etc.) are the ones which, as a group, enable it to most frequently ‘win’ against its competitors.
So strategy’s first and foremost role in business was, and continues to be serving as a tool for specifically dealing with every firm’s most fundamental challenge: competition.
For Michael Porter of the Harvard Business School (the guru’s guru of strategy), the connection is absolute:
“…for Porter, strategy always means “competitive strategy” within a business.”
Magretta, Joan. Understanding Michael Porter:
The Essential Guide to Competition and Strategy. 2012.
Taking this equivalence one step further, because its competitive strategy deals with the highest-level challenge faced by all businesses, it can be argued that it is also its business strategy (if not, what would be the higher level, more ubiquitous business challenge that deserves this overarching label?). In Porter’s view, both labels refer to the same concept, and as such we conclude that Competitive Strategy = Business Strategy.
A firm’s business (competitive) strategy is not intended to address the many other things it has to do to meet the needs of its customers and be an ongoing operation (many of those can be properly addressed by other means). Rather, its purpose is quite specific: To effectively identify those aspects of a business that enable its offerings to consistently win in its marketplace and make sure they are effectively and consistently addressed and maintained.
Business Strategy = Marketing Strategy?
There is no question that marketing takes the lead in making the relevant market-facing choices in the creation of a business strategy. However, it cannot make them in isolation—they have to be made collaboratively with the rest of the company to make sure it is capable (or can become capable) of delivering on the chosen unique value proposition to the targeted customers. If not, marketing will be promising customers something the company can’t deliver.
Once those critical choices are made, however, they become the property of the company, not marketing. They represent the promise the company makes to its market, not the promise that marketing makes. The promise and its fulfillment are collectively the entire company’s chosen response to the challenge of competition. And that is what is addressed by its business strategy.
Marketing has a tremendous responsibility to make sure the right market-facing choices are made, but fulfillment does not fall within its jurisdiction; rather, it is the responsibility of most, if not all the departments outside of marketing which create, deliver and support the firm’s offerings.
Different Challenges, Different Strategies
As was said earlier, before an effective strategy can be developed, the challenge that needs to be addressed has to be explicitly identified. For a company, that’s competition; for marketing, its challenge has to be defined by and drawn from the specific role it plays in helping the company respond to that competition.
The ‘marketing strategy’ is the tool that marketing uses to guide and manage its response to its own challenge(s) in helping the company successfully execute its business strategy. Marketing’s strategy(or strategies) deals with things over which it has sole, if not primary responsibility, and should be stated in terms of the specific challenges the department faces in those areas (e.g., creating awareness, educating customers, encouraging trial, promoting advocacy, establishing thought leadership, managing the company image and brand, etc.).
The market-facing choices of a business strategy are most certainly present in the marketing strategy, but as ‘givens’, handed down from the business strategy. They are not there as variables that marketing has at its disposal to independently adjust as it deems appropriate. They represent the starting point from which marketing must work its magic.
If it turns out that at some point changes are needed in the current market-facing, Business Strategy choices, marketing must involve the fulfillment functions in the change process to assure any modifications to the promise can be properly met. It is company management that gives approval for the undertaking—not marketing management—and they are the ones who approve any additional resources needed and establish its priority against all the other demands on the value-creation side of the business.
So a company’s business strategy and its marketing strategy cannot be the same because they address different challenges to the business. Assuming they are equivalent muddies senior management’s responsibilities which can only inhibit a company’s success in meeting the challenge of competition.