As a business, your overall goal will likely grow and remain competitive in the marketplace. Corporate and business development are practices that help companies achieve growth through different means.
Below, we discuss the difference between the two practices and how they relate to your business operations.
What is Corporate Development?
Corporate development is achieving company growth through internal restructuring and external opportunities for acquisitions and mergers, investments, and asset divestments. All corporate development processes increase the value of a business.
Internal restructuring typically involves changing current management to increase efficiency, such as hiring new staff, combining existing positions, or eliminating other positions.
Corporate development is indirectly related to sales, as management restructuring and acquisitions will increase a company’s ability to serve customers and drive sales. Still, the processes come long before the customer receives an order.
What is Business Development?
Business development is about identifying opportunities to develop relationships with peer companies to achieve key business objectives and add value to customers. These relationships are usually developed with companies with similar goals and related offerings.
For example, a restaurant associated with local delivery services. The delivery business can make more money through a new customer base. The restaurant can increase its number of orders when customers have more ways to get their food.
Business development is closely related to sales because partnerships increase value for customers and inspire them to purchase.
The business development process begins through market research and qualification of prospects (companies) with whom it makes sense to partner.
Difference Between Corporate Development and Business Development
Business and corporate development are the same in focusing on activities to help businesses grow. Both processes provide a competitive advantage, as their ultimate goal is to help a company increase the value it can provide to a target audience.
Both may also involve relationships with outside organizations, and business development teams may exist within corporate development teams.
They differ in that business development is external relationships, and corporate development is external growth through internal change.
While corporate development involves finance, it does not directly increase sales, as financial transactions include acquisitions and mergers and hiring new staff.
Business development is more closely related to sales because partnerships with outside companies lead to more sales among consumers.
How Do Business Development and Corporate Development Work Together?
Both processes can, however, work together.
For example, a corporate development team may hire a new vice president of marketing to oversee all marketing operations. This new hire brings unique prospects for expansion that will help the company grow.
New ideas impact business development as they involve new markets and new relationships with other relevant companies in those markets.