Concept of Strategy

Central to understanding the process of strategic management

Term strategy derived from Greek word strategos-which means
generalship the actual direction of military force. Combines stratos (the
army) and ago (to lead)
Strategy means the art of the general or the art of the leading
The element of surprise provides great competitive advantage. Business/
corporate strategy is formulated, implemented and evaluated on the
assumption of competition while of military on conflict.
The strategy of a corporation forms a comprehensive master plan stating how
the corporation will achieve its mission and objectives. It maximizes
competitive advantage and minimizes competitive disadvantage.
Definitions
Strategy is the determination of basic long-term goals and objectives of an
enterprise, adoption of course of action to attain these goals, and the allocation
of resources to carry out these goals.
Alfred Chandler
Strategy is a unified, comprehensive and integrated plan designed to assure
that the basic objectives of the enterprise are achieved.
Gluek
Strategy is a set of decision making rules for the guidance of organizational
behavior. Ansof
Developing and communicating the companys unique position, making tradeofs, and forging fit among activities. Michael Porter
Strategy is

Broad course of action for organization, not specific

It is a means to end
It is a game plan
Set of decision rules
Common thread which provides one common identity to the
organization
Incorporates all activities to take organization from current to
desired future state
Few terms
Tactics----are sub strategies, comparatively short term than strategies
Plans----future course of action based on certain predictions used to execute
strategy, to pull strategy into action. Plans are periodic. Strategies are not
defined in terms of periods. Eg 3 months plan and 6 months plan

Rules------ Prescribed course of action. What to do under certain conditions.

They are rigid.
Policies----- Broad guidelines, broad framework. What to do , what not to do.
Procedure----- Set of related task performed one after another in a sequential
manner.
According to Mintzeberg
1. Strategy sets direction
Advantage: Charts the course of an organization so that it sails cohesively
through its environment.
Disadvantage: Blinds one to change and potential danger as one is told
about the direction.
2. Strategy focuses efort
Ad: Strategy promotes coordination of activities. Provides uniformity and
cohesiveness. Without strategy chaos can prevail.
Dis: May lead to groupthink as on doesnt think diferently. There may not be
peripheral vision, to open other possibilities.
3. Strategy defines the organization
Ad: Provides you a concept of business, what business you are into. Strategy
provides a way to understand the organization and to distinguish it from
others. It provides meaning.
Dis: By providing rigid concept and defining too sharply, one becomes
stereotype. Rich complexity of the system is lost.
4. Strategy provides consistency
Ad: Reduces ambiguity and doubts, Provides order.
Dis: Stifles creativity and innovation
Ansof said strategy includes 4 components--Product/market Scope
Growth vector
Competitive advantage
Synergy