The Concept of Strategy

1. The concept of Strategy

The Role of Strategy in Success

More important than luck was the ability to recognize opportunities when they appeared and to have the clarity of direction and the flexibility necessary to exploit these opportunities.

The key in success stories was the presence of a soundly formulated and effectively implemented strategy.

Characteristics of a strategy that is conducive to success:

1. Goals that are simple, consistent, and long term.

2. Profound understanding of the competitive environment.

3. Objective appraisal of resources. Exploit internal strengths and protecting areas of weakness.

4. Effective implementation. Without effective implementation, the best laid strategies are of little use.

Whether we look at warfare, chess, politics, sport or business, the success of individuals and organizations is seldom the outcome of a purely random process. Nor is superiority in initial endowments of skills and resources typically the determining factor. Strategies that build on the basic four elements almost always play an influential role.

Success has gone to those who managed their careers most effectively, typically by combining the four strategic factors.

The Basic Framework for Strategy Analysis

Our framework views strategy as forming a link between the firm and its external environment. The firm embodies three sets of key characteristics:

- Its goals and values.

- Its resources and capabilities.

- Its organizational structure and systems.

The external environment of the firm comprises the whole range of economics, social, political and technological factors that influence a firm’s decision and its performance. However, for most strategy decisions. The core of the firm’s external environment is its industry, which is defined by its relationships with customers, competitors, and suppliers.

The task of business strategy, then, is to determine how the firm will deploy its resources within its...