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A strategy is all about integrating organizational activities and utilizing and allocating the scarce
resources within the organizational environment so as to meet the present objectives. While
planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any
act taken by a firm is likely to be met by a reaction from those affected, competitors, customers,
employees or suppliers.
Definitions of Strategy
Kenneth Andrews defined strategy as “the pattern of major objectives, purposes or goals and
essential policies or plans for achieving the goals, stated in such a way as to define what business
the company is in or is to be in and the kind of company it is or is to be.” This definition of strategy
emphasizes on purpose and the means by which purpose will be achieved. It also emphasizes on
the values and the cultures that the company stand for.
Nature of strategy
• Strategy is a major course of action through which an organization relates itself to its
environment particularly the external factors to facilitate all actions involved in meeting the
objectives of the organization.
• Strategy is the blend of internal and external factors. To meet the opportunities and threats
provided by the external factors, internal factors are matched with them.
• Strategy is the combination of actions aimed to meet a particular condition, to solve certain
problems or to achieve a desirable end. The actions are different for different situations.
• Due to its dependence on environmental variables, strategy may involve a contradictory
action. An organization may take contradictory actions either simultaneously or with a gap of
time. For example, a firm is engaged in closing down of some of its business and at the same
time expanding some.
• Strategy is future oriented. Strategic actions are required for new situations which have not
arisen before in the past.
• Strategy requires some systems and norms for its efficient adoption in any organization.
• Strategy provides overall framework for guiding enterprise thinking and action.
Essence of Strategy
Strategy, according to a survey conducted in 1974, includes the determination and evaluation of
alternative paths to an already established mission or objective and eventually, choice of the
alternative to be adopted. Strategy is characterized by four important aspects:
Process of Strategy
There are mainly two processes which are generally used in the strategy management.
1) Prescriptive Strategic Process. :“A prescriptive strategy is one whose objective is defined in
progress and whose main elements have been developed before the strategy commences.”
Such an approach usually starts with an analysis of the outside environment and the
resources of the company. The objectives of the organization are then developed from this.
There then follows the generation of strategic options to achieve the objectives, from which
one (or more) may be chosen. The chosen option is then implemented.
2) Emergent Strategic Process : An emergent or Learning strategy does not have the similar
set objective. The whole process is more experimental with various possible outcomes
depending on how matters extend. “An emergent strategy is one whose final objective is
undecided and whose elements are developed during the course of its life, as the strategy
proceeds.” Thus the early stages of emergent strategy may be similar to prescriptive strategy
– analysis of the environment and resources. But then the process becomes more round,
knowledge and experimental.
Some core competencies that firms might have include technical superiority, its customer
relationship management, and processes that are vastly efficient. In other words, each firm has
a specific area in which it does well relative to its competitors, this area of excellence can be
reused by the firm in other markets and products, and finally, the area of strength adds value to
the consumer. The implications for real world practice are that core competencies must be
nurtured and the business model built around them instead of focusing too much on areas where
the firm does not have competency. This is not to say that other competencies must be neglected
or ignored. Rather, the idea behind the concept is that firms must leverage upon their core
strengths and play to their advantages.
• Isolate its key abilities and hone them into organization-wide strengths
• Compare itself with other companies with the same skills to ensure that it is developing unique
capabilities
• Develop an understanding of what capabilities its customers truly value, and invest accordingly
to develop and sustain valued strengths
• Create an organizational roadmap that sets goals for competence building
• Pursue alliances, acquisitions and licensing arrangements that will further build the
organization’s strengths in core areas
• Encourage communication and involvement in core capability development across the
organization
• Preserve core strengths even as management expands and redefines the business
• Outsource or divest noncore capabilities to free up resources that can be used to deepen core
capabilities