As a business, your overall goal is likely to achieve growth and remain competitive in your market.
Corporate development and business development are two practices that help businesses achieve growth through different means. Read on to learn the difference between the two and how they relate to your business operations.
What is corporate development?
Corporate development is the process of achieving growth for a business through internal restructuring and external opportunities for acquisitions and mergers, investments, and divesting assets. All corporate development processes increase the value of a business.
Internal restructuring is typically changing the current management to increase efficiency, such as hiring new staff, combining existing positions, or removing other positions.
An example of internal corporate restructuring can be combining two senior positions that are closely related. An external growth example is a larger company acquiring a smaller company that offers something beneficial to its offerings, like PayPal acquiring Venmo, a money sending service meant for friends and family.
Corporate development indirectly relates to sales as management restructuring and acquisitions will increase a business’s ability to serve customers and drive sales, but the processes come long before a customer receives a receipt.
What is business development?
Business development is identifying opportunities to develop relationships with similar companies to achieve key business objectives and bring value to customers. These relationships are usually developed with companies with similar goals and related offerings.
For example, a restaurant partnering with local delivery services so people can order their favorite food for delivery. The delivery business can make more money through a new client base, and the restaurant can increase its number of orders when customers have more ways to get its food.
Business development is closely related to sales because partnerships increase value for customers and inspire them to make purchases. The business dev process also begins through market research and qualifying prospects (companies) that it makes sense to partner with.
Difference Between Corporate Development and Business Development
Business development and corporate development are the same in that they focus on activities to help companies grow. Both processes bring a competitive advantage, as their end goal is to help a business increase the value it can provide to a target audience. Both can also involve relationships with external organizations, and business dev teams can exist within corporate dev teams.
They are different in that business dev is external relationships, and corporate dev is external growth through internal changes. While corporate dev 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 external businesses drive 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 along unique perspectives for expansion that help the company grow.
The new ideas impact business development as they involve new markets and new relationships with other relevant businesses in those markets.
Over To You
Most businesses should have corporate development and business development teams rather than one over the other. While each one helps your business grow and increase sales, both do so in different ways that are required for your company to succeed.