Many definitions of strategy have been developed over the years and a closer examination of such definitions converge on the following. Strategy deals with making major decisions that affect the long-term direction of a business. Major business decisions are strategic in nature and focus on.
Definition of business: A strategic fundamental element is defining the business we are in. Organizations need to stay in touch with the external competitive environment and anticipate and adapt to changes. Business leaders must define the scope or range of activities of the organization and determine the markets in which the organization will compete.
Your organization must be competitive in the future. Strategic decisions therefore need to define the basis of sustainable competitive advantage. What skills and resources are required to thrive in today's defined markets and how can they be used to optimum advantage? It must be considered in the long term, as well as aiming to adapt the organizational capacity to the desired goals and the external environment. This process often has major resource implications in terms of investment and rationalization.
An integrated strategy has a broad impact and affects all functional areas in an organization. An effective strategy is able to coordinate various functions/activities in an organization to achieve common goals. By taking an organization-wide view of the corporation, managers should be better able to target resources, eliminate waste, and create synergies. Synergy occurs when the combined effect of tasks/activities is greater than their individual contributions. It is imperative that business leaders share a common vision and sense of purpose to achieve an integrated approach.
Strategy should provide consistency of vision and focus for the organization. Tactical activities can change and be easily adapted in response to market conditions, but strategic direction must remain constant. In addition, strategic management can provide general tools and analytical techniques that enable the assessment and control of complex problems, situations, and functional areas.
The objective of this process is to specify corporate goals and establish ways to achieve such goals. The intention is to react to and of course influence the competitive environment for the benefit of the organization. Any such advantage must be sustainable over the long term, but flexible enough to adapt and evolve as needed.
Remember, a strategy and a corporate/strategic plan are not the same thing. Strategy defines general concepts of future competitive advantage and reflects intent, while strategic plan specifies the choices, sequence, resources, timing, and specific objectives required to achieve the strategy.
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