What is a Strategy?

What is a Strategy?
The term “strategy” is an overloaded in everyday conversations because most people including professional practitioners do not bother to explicitly establish their point of view into what is essentially a layered concept. Essentially, when people use the word “strategy”, they are expressing concerns/interest in one of the layers of a layered concept; strategic intent, competitive strategy operational strategy, or “functional” strategy.

Levels of Strategy
Conceptually, a strategy in any of its myriad interpretation and manifestations in any of these layers is about decision making, Regardless of the person using the term, and the “type” of strategy being pursued the fundamental meaning of the word with respect to strategy type remains the same.

• Strategic intent expresses the aspirations of achieving some specified goals in the future without committing to how this would happen. In a business context, strategic intent is expressed through “corporate” strategy which sets the direction and positioning of the corporation.

 

• Competitive strategy may be interpreted as, the set of decisions on what action to take to achieve a specified objective at some future time, in some desired but uncertain future situation. This interpretation of the word/concept is consistent with all usage of the term in areas such as game plays/theory (i.e., in chess, football, soccer, etc.), military strategy, business competitive strategy, personal growth/development strategy, organization growth/development strategy, etc.

 

• Functional strategy - Functional strategies are derived from Operations Strategies and expressed in terms of organizational goal models. Each functional area or department is assigned the specific goals and objectives it must achieve to support the higher-level strategies. Functional strategies specify outcomes to be achieved from the daily operations of specific departments or functions. A Functional Strategy, for any business, large or small, focuses (the achievement of a goal) on the skills and abilities of individual departments and their employees. Functional areas of a business that are commonly assigned function-specific goals are human resources, production, research and development, marketing, and information technology. Of course, the functional areas that are assigned functional strategies depend on the strategic plan itself and varies by industry, organization, or size. Functional strategies reflect that strategic and tactical objectives typically require the involvement of multiple functional areas (i.e., departments, divisions, branches, etc.). The tactical plan divides the strategic plan into the tasks and objectives of each functional area defined to support achievement of strategic objectives.

 

• Operational Strategy - Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking form policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. Operations strategy defines how an entire business will allocate its resources to support operations and its strategic goals. Operations strategies focus on maximizing the efficiency and effectiveness of production while minimizing operating costs.

Strategy Patterns
A company's strategy can be deduced from the pattern of actions and approaches taken by the company. These may include:

1. Moves to diversify the company's revenue base and enter into new industries or businesses.
   
2. Efforts to alter geographic coverage.
   
3. Efforts to integrate backwards and forwards.
   
4. Effors to broaden/narrow the product line, alter product quality, or modify customer service.
   
5. Actions to capitalize on new opportunities - [new technologies, product innovation, a chance to purchase a rival company, new trade agreements that open up foreign markets.]
   
6. Defensive moves to counter the actions of competitors and defend against external threats.
   
7. Actions to respond to changing industry conditions - [shifting demand patterns, new government regulations, the globilization of competition, exchange rate instability, entry/exist of new competitor.]
   
8. Fresh offensive moves to strengthen the company's long-term competitive position and secure a competitive advantage.
   
9. Actions to improve short-term profitability.
   
10. Moves and approaches that define how key functions and activities are being managed. 
    

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