Strategy

What is Strategy?

* An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage

* When choosing a strategy, firms make choices among competing alternatives – involves opportunity costs

* The chosen strategy indicates what the firm intends to do (eg. Sell high-end products), as well as what it does not intend to do (eg. Sell low-end products)

* A strategy is a set of objectives, policies and plans that, taken together, define the scope of the enterprise and its approach to business

* A firm’s strategy is defined as its theory about how to gain competitive advantages VRIN Framework

* It’s about resolving paradoxes

* Globalisation vs localisation (champion of own turf; big fish in small ocean)

* Revolution vs evolution

* Profitability vs responsibility (CSR; taking care of stakeholders)

* Control vs chaos (less processes increases creativity?)

* Compete vs collaborate (oligopoly)

* Incremental vs radical (innovation)

* Strategy is the direction and scope of an organisation over the long term, which achieves the advantage for the organisation through its configuration of resources within a changing environment and to fulfil stakeholder expectations

Strategy | Tactics |

TIME-SCALE: Medium to long-term horizon | Short-term horizon |

Broad scope | Narrow scope |

Not tactical even in future | May turn out to be strategic in future |

MAGNITUDE: Synthesised, big picture, conceptual, affecting a large part of entire organisation | Detailed operational steps, implementing strategy |

Competitive strategy means choosing different set of activities to deliver a unique mix of value | Focus on operational effectiveness |

COMMITMENT: Costly to change | Easy to change, adaptive |

A comprehensive master plan on how the corporation will achieve its mission and objectives | Link between formulation and implementation of strategy...