1-BUSINESS STRATEGY.

INTRODUCTION TO STRATEGY.
DIFFERENCES BETWEEN STRATEGY & TACTICS,
VARIOUS DEFINITIONS OF STRATEGY & ITS 5
COMPONENTS

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Understanding Strategy And Tactics .
• The Concept of Strategy is Central to understanding the Process of Strategic
Management. The Term Strategy is derived from a Greek word Strategos, which
means Generalship- the Actual Direction of Military Force as distinct from the
Policy Governing its Deployment.
• Literally therefore the word Strategy means the Art of General.
• Just as the Term “Strategy” originated with the Greeks, so too did the Term
“Tactics”. The original meaning of “Tactics” is “Order”, literally the “Ordering of
Formations on the Battle Field.”
• Chinese General Sun Tzu described the difference this way “All the men can see
the Tactics I use to conquer, but what none can see is the Strategy out of which
great victory is evolved.”
• In other words, Strategy is the Basic Plan or Idea and Tactics is how the Strategy
is Implemented or Put into Action.
• The Complementary nature of Strategy and Tactics has defined their
intertwined existence. In the Military realm, Tactics teach the use of armed
forces in Engagements, while Strategy teaches the use of Engagements to
achieve the Goals of the War.
• Strategy and Tactics must work in tandem, without it your Organization cannot
efficiently achieve Goals. If you have Strategy without Tactics, you have big
thinkers and no Action. If you have Tactics without Strategy, you have disorder.
• One Management Expert said “Organizations need big wings (Strategic Thinking
) and Feet (Capability to Achieve).

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Differences Between Strategy & Tactics(Cont’d)
▪ The difference between Strategy and Tactics: Strategy is done above shoulders,
Tactics are done below the shoulders.
▪ For Strategic Thinking, Right Side of the Brain is used and for Implementation of
the Strategy( Tactics), Left Side of the Brain is used. For Strategic Thinking and
Planning we need People who have Creative Ideas and Innovative Brain. For
Tactics, we need people with Administrative Skills and Systematic Approach.
▪ In Business today, we see the Two Terms misused, confused and abused in many
different ways. The difference between Strategy and Tactics is often described as
“Strategy is Long Term and Tactics are Short Term”. This is an incomplete way of
explaining their meanings.
▪ Both Strategy and Tactics are required to achieve the Company’s Goals and
Objectives. Strategy is our Path or Bridge from going from where we are today to
our Goal. The Tactics then are how specifically or Tangibly we will do that.
▪ Since we cannot see or physically reach and touch Strategy, it is often skipped in
favor of going straight to Tactics. If you do not set Strategy before Tactics, then
you have no way of changing course if you are not achieving your objective.
“Think Strategically & Act Tactically”

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Differences Between Strategy & Tactics(Cont’d)
Strategy.
Purpose. To identify clear Broad Goals that
advance the overall Organization &
Organize Resources.
Roles Individuals who influence resources in
the Organization. They understand how
a set of Tactics work together to achieve
Goals.
Accounta Held Accountable to overall health of
bility. organization. Strategy is often what you
do not do.
Duration Long Term, changes infrequently
Methods. Uses experience, research, analysis,
thinking, then communication.
Outputs. Produces clear Organizational Goals,
Plans, Maps, Guideposts, and key
performance measurements.
Tactics.
To utilize specific Resources to achieve
sub-goals that support the defined
Mission.
Specific domain experts that maneuver
limited resources into actions to achieve
a set of Goals.
Held accountable to specific resources
assigned.
Short Term, flexible to specific Market
Conditions.
Uses experience, best practices,
processes and teams.
Produces clear deliverables and outputs
using people, tools, time etc.
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 Various Definitions of Strategy
We will examine the Definitions of Strategy as given by some
Management Experts.
▪ Alfred D. Chandler (1962): “The Determination of the Basic
Long Term Goals and Objectives of an Enterprise and the
Adoption of the courses of Action and the Allocation of
Resources necessary for carrying out these Goals”.
▪ Kenneth Andrews (1965): “The Pattern of Objectives,
Purposes, Goals, and Major Policies and Plans for achieving
these Goals in such a way so as to define what Business the
Company is in or is to be and the kind of Company it is or to
be.”
▪ Igor Ansoff (1965): “The common thread among the
Organization’s Activities and Product Markets that Defines
the Essential Nature of Business that the Organization was or
Planned to be in Future.
▪ In 1984, Igor Ansoff Redefined Strategy as “Basically Strategy
is a set of Decision Making Rules for Guidance of
Organizational Behavior.”
▪ We will follow the Definition given by Walker, Boyd, Mullins &
Larreche for Strategy as shown in the next slide.
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The Components of Strategy.
▪ What is a Strategy? ( As per Walker, Boyd, Mullins & Larreche)
▪ A Strategy is a fundamental pattern of present and planned objectives,
resource deployments, and interactions of an Organization with
Markets, Competitors and other Environmental Factors.
▪ A Strategy should specify 1) What objectives to be accomplished, 2)
Where?( On Which Industries and Product-Markets to focus and 3)
How?( Which resources and activities to allocate to each Product-
Market to meet Environmental Opportunities and Threats and to gain a
competitive advantage.)
▪ The Components Of Strategy. A well developed Strategy contains five
components, or set of issues, as given below.
1) Scope.
2) Goals and Objectives.
3) Resource Deployment.
4) Identification of a Sustainable Competitive Advantage.
5) Synergy.

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The Components Of Strategy(Cont’d)
1) Scope. The scope of an organization refers to the breadth of its strategic
domain-the number and types of Industries, Product Lines, and Market
Segments it competes in or plans to enter. Decisions about an
Organization’s Strategic Scope should reflect management’s view of the
Firm’s Purpose or Mission. This common thread among its various activities
and Product-Markets defines the essential nature of what its business is
and what it should be.
2) Goals and Objectives. Strategies should also detail desired levels of
accomplishment on one or more dimensions of performance- Such as
volume growth, profit contribution, or return on investment- over specified
time periods for each of those businesses and Product-Markets and for the
Organization as a whole.
3) Resource Deployments. Every Organization has limited Financial and
Human Resources. Formulating a Strategy also involves deciding how those
resources are to be obtained and allocated, across Businesses, Product-
Markets, Functional Departments, and Activities within each Business or
Product-Market.

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The Components of Strategy. (Cont’d)
4) Identification of a Sustainable Competitive Advantage. One
Important part of any Strategy is a specification of how the Organization
will compete in each business and Product-Market within its domain.
• How can it position itself to develop and sustain a Differential Advantage
over current and potential Competitors?
• To answer such questions, managers must examine the Market
Opportunities in each Business and Product-Market and the Company’s
distinctive Competencies or Strengths relative to its Competitors.
5) Synergy. Synergy exists when the Firm’s businesses, Product-Markets,
Resource Deployments, and Competencies complement and reinforce
each other.
• Synergy enables the total performance of the related Businesses to be
greater than it would otherwise be: The whole becomes greater than the
sum of its parts.