The term 'Strategy' has been adapted from war and is being increasingly used in business to reflect broad overall objectives and policies of an enterprise. Literally speaking, the term 'Strategy' stands for the war-art of the military general, compelling the enemy to fight as per out chosen terms and conditions. A strategy is a special kind of plan formulated in order to meet the challenge of the policies of competitors. This type of plan uses the competitors' plan as the background. It may also be shaped by the general forces operating in an industry and the economy.

Edmund P Learned has defined strategies as "the pattern of objectives, purposes or goals and major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be and the kind of company it is or is to be".

Haynes and Massier have defined strategy as “the planning for unpredictable contingencies about which fragmentary information is available”.

According to David I Cl eland and William R King, "Strategy is the complex plans for bringing the organisation from a given posture to a desired position in a further period of time".

In the words of Haimann, "Strategy is a policy that has been formulated by the top management for the purpose of interpreting and shaping the meaning of other policies".

According to C. T. Hardwick and B. F. Landuyt, "The word strategy is used to signify the general concept and salient aspect of games manship as an administrative course designed to bring success".

According to Koontz and O' Donnell, "Strategies must often denote a general programme of action and deployment of emphasis and resources to attain comprehensive objectives".

Strategies are plans made in the light of the plans of the competitors because a modern business institution operates in a competitive environment. They are a useful framework for guiding enterprise thinking and action. A perfect strategy can be built only on perfect knowledge of the plans of others in the industry. This may be done by the management of a firm putting itself in the place of a rival firm and trying to estimate their plans.

Characteristics of Strategy

  1. It is the right combination of different factors.
  2. It relates the business organisation to the environment.
  3. It is an action to meet a particular challenge, to solve particular problems or to attain desired objectives.
  4. Strategy is a means to an end and not an end in itself.
  5. It is formulated at the top management level.
  6. It involves assumption of certain calculated risks.

Strategy Formulation

There are three phases in strategy formation

  • Determination of objectives.
  • Ascertaining the specific areas of strengths and weakness in the total environment.
  • Preparing the action plan to achieve the objectives in the light of environmental forces.

Business Strategy

Seymour Tiles offers six criteria for evaluating an appropriate strategy.

Internal consistency: The strategy of an organisation must be consistent with its other strategies, goals, policies and plans.

Consistency with the environment: The strategy must be consistent with the external environment. The strategy selected should enhance the confidence and capability of the enterprise to manage and adapt with or give command over the environmental forces.

Realistic Assessment: Strategy needs a realistic assessment of the resources of the enterprise—men, money and materials—both existing resources as also the resources,the enterprise can command.

Acceptable degree of risk: Any major strategy carries with it certain elements of risk and uncertainty. The amount of risk inherent in a strategy should be within the bearable capacity of the enterprise.

Appropriate time: Time is the essence of any strategy. A good strategy not only provides the objectives to be achieved but also indicates when those objectives could be achieved.

Workability: Strategy must be feasible and should produce the desired results.

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