What is strategy? - Marketing Strategy

Over the years, many definitions of ‘strategy’ have been developed and close examination of such definitions tends to converge on the following– strategy is concerned with making major decisions affecting the long-term direction of the business. Major business decisions are by their very nature strategic, and tend to focus on:

• Business definition: A strategic fundamental is defining the business we are in. organizations need to anticipate and adapt to change by keeping in touch with the external competitive environment. Business leaders need to define the scope (or range) of the organization’s activities and determine the markets in which the organization will compete. We are defining the boundaries of activity and ensuring management face up to the challenges of change.
• Core competencies: The organization must be competitive now and in the future. Therefore, strategic decisions need to define the basis of sustainable competitive advantage(s). What skills and resources are needed in order to prosper within our defined markets and how can they be used to optimum advantage? It is essential that this is considered over the long term and aims to match organizational capability with desired goals and the external environment This process often has major resource implications, both in terms of investment and rationalization.
• An integrative approach: Strategy has a wide-ranging impact and therefore affects all functional areas within the organization. Effective strategy is able to co-ordinate the different functions/activities within the organization in order to achieve common goals. By taking a ‘whole-organization’view of the corporation, managers should be better able to target resources,eliminate waste and generate synergy. Synergy occurs when the combined effect of functions/activities is greater than their individual contribution. It is vital that business leaders articulate a common vision and sense of purpose, in order to achieve an integrative approach.
• Consistency of approach: Strategy should provide a consistency of approach, and offer a focus to the organization. Tactical activities may change and be adapted readily in response to market conditions, but strategic direction should remain constant. Additionally, strategic management can provide common tools and analytical techniques, enabling the assessment and control of complex issues, situations and functional areas.

The process aims to specify corporate objectives and establish ways of achieving such objectives. The intent is to react to, and of course influence,the competitive environment to the advantage of the organization. Any such advantage must be sustained over the long term, but be flexible enough to adapt and develop as required. Note that strategy and a corporate/strategic plan are not one and the same. Strategy defines the general concepts of future competitive advantage and reflects intent, whereas a strategic plan specifies the selection, sequence, resources, timing and specific objectives required to achieve the strategy.

The basics of strategy