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Business Strategy

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DOI: 10.1002/9781119010722.iesc0015

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Business Strategy
CRAIG S. FLEISHER
Università della Svizzera Italiana, Switzerland

Business strategy means different things to different people. This entry offers a sub-
stantive discussion of what is meant by “strategy” and “business strategy”; the different
elements of a business strategy; and why top management efforts to craft strategy are
aimed at building a competitive advantage that can be sustained as long as possible.
A business strategy is partly planned and partly reactive, and tends to evolve over time.
The effective crafting or development of strategy, combined with effective strategy exe-
cution, is considered to be effective management. For communication practitioners, it
is often a formal part of their job descriptions to support the achievement of desired,
strategic business outcomes. Many have learned through formal or professional educa-
tion that they need to be part of the team that crafts and shapes the business strategy,
though many C-level/top executives struggle to understand how communication prac-
titioners can best support the business strategy.
A business strategy is commonly viewed, among other things, as a planning docu-
ment that is generated by the business on a regular basis; a process used to generate
a plan; an amorphous concept that describes how the organization will compete and
relate itself among different stakeholders; or a purposive, specified set of actions that
need to be taken in order to accomplish higher order organizational aims.
A popular term that has perennially made “top 10” listings of important business
concepts since the 1980s, business strategy is often misunderstood, badly crafted, and
poorly communicated by communication practitioners and the individuals entrusted
with developing and executing it for their organizations. It is likely that the confusion
is caused mostly by disagreements about the term “strategy,” as the term business is
generally well understood as a concept, discipline, or field of endeavor. Strategy, on the
other hand, has a much shorter scholarly history, is less established, and does not have
the clarity of scope that business entails.
Strategic matters are a key focus of this encyclopedia, and indeed the word “strategic”
shows up in its title. The Greek root origin of the word “strategy” is the word “strategia,”
which essentially means the roles of the leader or the commander’s intent in combat-
ive situations. Common, contemporary dictionary definitions of the term offer words
like approach, deliberate actions, plan, policy, scheme, stratagem, or tactics. These ideas
continue to be associated with today’s use and applications of business strategy and are
taught in most business school instruction to the future business leaders who will be
responsible for their organization’s strategy.
For the purposes of this encyclopedia entry, an organization’s business strategy rep-
resents executive management’s plan for running the business and conducting operations.

The International Encyclopedia of Strategic Communication. Robert L. Heath and Winni Johansen (Editors-in-Chief),
Jesper Falkheimer, Kirk Hallahan, Juliana J. C. Raupp, and Benita Steyn (Associate Editors).
© 2018 John Wiley & Sons, Inc. Published 2018 by John Wiley & Sons, Inc.
DOI: 10.1002/9781119010722.iesc0015
2 B U S I N E S S S T R AT E G Y

The process employed for developing strategy represents a commitment to pursue a

particular set of actions from among many available choices or actions, and usually
answers the question “How?” These choices surround facets of the business such as the
means for how it will go about attracting and satisfying customers; how the organization
will compete successfully against rivals or competitors; how it will choose to conduct
operations; and how the organization will improve its financial, industry, and market
performance.
Unfortunately, strategy and strategic are words used and sometimes misused today
to describe almost every choice, decision, and/or action taken, when in reality there is
a clear mix of the no less valuable, operational or tactical decision making and orga-
nizational actions also taking place. The generic use of a word such as “strategy” or
“strategic” can diminish its authentic, normative role and mask the impact that a true
strategic action, choice, or decision has.
Strategic actions, choices or decisions, as opposed to tactical, operational, or instanta-
neous ones, have a unique set of characteristics to differentiate them. These distinctions,
which can be seen in the following dozen conditions, occur along the differing dimen-
sions of time, frequency, effort required, consequences, and impact. As contrasted with
nonstrategic forms of decisions, strategic actions or decisions typically:

• address at least a medium-term time horizon, at best long-term (time);

• affect competitive dynamics between the focal and other organizations in a bounded
environment, such as an ecosystem, industry, or market (impact);
• affect the long-term direction of the organization (consequences);
• become the overarching blueprint for subsequent choices and decisions (impact);
• concern managerial decisions and actions that materially affect the success and sur-
vival of the organization (consequences);
• entail the judgment required to dynamically position an organization and its
resources so as to maximize long-term results in the face of potentially irreducible
uncertainty, aggressive rivals, and challenging competition (impact);
• influence many, if not all, of the organization’s key activities (consequences);
• involve major change to the organization’s core activities (impact);
• link the organization with both its current and future environment (consequences);
• necessitate acquiring significant input from key people in vital roles, both inside
and outside the organization (effort);
• occur only once, infrequently, or emerge from a formalized planning cycle (fre-
quency);
• require substantial resources to research, analyze, formulate, and implement
(effort).

If all, or a substantial majority, of the preceding elements are present, the greater the
likelihood that the decision is indeed strategic; nevertheless, just because an action,
choice, or decision is not strategic does not make it unimportant or insignificant.
Indeed, the cumulative effects of many nonstrategic decisions help to determine
the performance of an enterprise in a marketplace, particularly in the shorter term.
 B U S I N E S S S T R AT E G Y 3

Decisions such as seasonal price discounting, direct mail campaigns, product enhance-
ments, label design, advertising channels, promotional vehicles, and/or ambush
marketing are all nonstrategic. They have a comparatively short-term lifespan and
shorter-term performance effects or consequences, compared ceteris paribus (all other
things remaining constant) with strategic decisions/actions.
The key to the identification of a strategic decision is that they are the ones typically
made by senior executives, managing directors, and/or the senior management
team—those individuals working within an organization’s so-called “C-suite.” Con-
sequently, the business organization that gets the strategic decisions “right” has a
greater chance of also getting the nonstrategic decisions right. For communication
practitioners, it is not only important that the organization gets the strategic decisions
right, but also that all the organizational members responsible for understanding the
strategy and translating it into day-to-day actions, operations, and tactics needed to
achieve it, have a clear sense of what they need to be doing (aided and supported by
effective communication).

Impact of different contexts on business strategy

It should also be recognized that business strategy can be more, or less, important to
organizations depending on their circumstances or contexts. One of the key aspects
of choosing effective strategies depends on the industry context the business organiza-
tion competes within. Whether a business chooses to compete in a fragmented versus
concentrated industry; local versus global industry; generic versus specialized indus-
try; and so forth, will result in different actions, choices, or decisions. For example,
an organization that faces lots of new rivals who are entering their industries or mar-
kets will derive greater value from an effective, unique business strategy. Contrast this
with an organization that faces minimal to no business competition and little change of
customer preferences over time.
In general, organizations that exist in high VUCA (i.e., variability, uncertainty,
complexity, and ambiguity) contexts or environments will benefit more from having
an effective business strategy than organizations which are experiencing lower levels
of the VUCA factors. There are plentiful opportunities to craft a strategy that aligns
with, or tightly fits, an organization’s own particular situation, and that can be seen as
either valuably unique or discernibly different from competitors’ strategies. However,
just crafting a coherent strategy does not necessarily mean it will be an effective one.
An effective strategy that is well executed is nearly always a sign of effective executive
management. In theory at least, organizations with effective executive management
should outperform organizations with less effective executive management across a
wide range of performance dimensions—most important among those the customer,
financial, industry, market, and stakeholder-related bases upon which they compete
with rival organizations.
The temporal dimension of business strategy in its larger context is also important.
Bruce Henderson, the founder of the famed business strategy consultancy the Boston
Consulting Group, wrote in 1981 that strategy depends upon the ability to foresee future
4 B U S I N E S S S T R AT E G Y

consequences of present initiatives. Most organizational executives recognize that the

future is, at least to some degree, unknowable. This is a key reason why business strategy
theorists recommend that choice givers and decision makers regularly engage in busi-
ness strategy development processes. This activity, at least in theory if not always in
practice, allows for the organization’s leadership to make better sense of how their orga-
nizations fit or align with their changing contexts. If they make choices and decisions
that can better align and realign their organizations with how these contexts evolve over
time, they will have benefited more from their business strategy development processes
and resultant strategy choices.
Every business must be prepared to change its strategy in response to emerging mar-
ket conditions; competitive moves by rivals; progress in science or technology; shifting
buyer needs and consumer preferences; emerging market opportunities; better or cre-
ative ideas for improving the strategy; and also in response to performance-based evi-
dence that the strategy is out of alignment or not achieving desired results. Ordinarily,
an organization’s strategy will evolve incrementally from executive management’s regu-
lar and planned efforts to fine-tune it. Nevertheless, on occasion, an organization will be
compelled to make a major strategy shift due to crises, disruptions, or significant and
sudden shifts. Some industry environments, like fashion merchandising or children’s
toys, for example, are characterized by high velocity change. Such businesses are forced
to rapidly adapt and modify their strategies, or even to choose a more opportunistic
footing prepared to capitalize on sudden openings that allow it to move in a direction
it hadn’t formally planned to go. Consequently, an organization’s strategy at any given
point in time is fluid and should always include some evergreen elements.

Communicating about business strategy in the organization

It is in the communication of the business strategy, and having organizational members

and external stakeholders achieve a shared sense or understanding of it, that commu-
nication practitioners start gaining the perceived or actual status as strategic commu-
nication practitioners. Referred to as the sense-making and sense-giving activities of
strategy, grasping and transforming the organizational leadership’s intent into ideas
that everyone else in the organization can make sense of, and coherently act upon, is
challenging and difficult. Barriers identified in both practice and scholarship that keep
communication practitioners from effectively communicating the business strategy can
include any individual or combination of the following.

• The business strategy never reaches fruition, is constantly being challenged inter-
nally, and fails to gel as a statement of the leadership’s intent.
• The business strategy is unsatisfactorily articulated by the organization’s leadership.
• The organization’s leadership could not actually agree or reach consensus on the
business strategy, and multiple versions exist in practice, if not in the plan itself.
• The communication practitioners were never, or are not, part of the processes
used to develop the business strategy. Consequently, they are asked in a second-
 B U S I N E S S S T R AT E G Y 5

or third-hand fashion to communicate it to others when they can’t fully appraise

leadership’s intent, both in terms of its “spirit” and “letter.”
• The business strategy is flawed, inconsistent, and/or otherwise unsound, and is
recognized as such by at least some other executive leaders in the C-suite or the
strategic communication practitioners themselves. Making it most challenging for
practitioners, these faults are often associated with ethical choices, decisions, and
actions that the strategy compels organizational members to take, whereby the
leadership identifies an unethical aim/goal, process, and/or associated actions used
to achieve it.
• The organization’s strategic communication practitioners do not appreciably or crit-
ically understand the business, and its competitive ecosystem (i.e., industry, mar-
kets, desired customers, product/service-level competition, regulators, etc.), deeply
enough to understand how to translate the business strategy into communication
that other employees can grasp and utilize.

Experiencing any of these barriers or impediments inhibits communication practition-

ers from being effective in communicating the business strategy. This role is not easy,
and requires the application of part “art,” “science,” and “craft” of strategic commu-
nication. The art part requires them to reach deep down into their creative abilities
and imaginations, being able to envision both the ways and the means for construc-
tively using communication to address the barriers. Strategic communication practi-
tioners are typically better able (than much of the rest of the population) to draw on
divergent thinking, specialized know-how, emotional intelligence, and aesthetic orien-
tations, among other qualities, in order to create a wider range of valuable new con-
cepts, ideas, communication modes, synapses, and/or visualizations that are needed to
overcome the actual and perceived gaps in sense-giving or understanding. From the
scientific perspective, communication practitioners should have both a broad and deep
awareness of the kinds of conceptual approaches and foundations, habits, methods,
models, practices (demonstrated, best), processes, structures, and systematic routines
underlying strategic communication within, and among, organizations that allow for
the reduction in these barriers. Last but not least, strategic communication practition-
ers have, by virtue of their achieving “strategic” status in organizations, likely cut their
teeth previously on these kinds of barriers, and have therefore experienced not only the
causes but also crafted the solutions that can overcome these barriers.
For those communication practitioners lacking real-world and practical experience,
they may seek to rely upon some codified “best practices” documented by professional
communication associations. Learning these can differentiate the effective practition-
ers from ineffective ones to some degree, but only to a point. This happens because
these codified practices are usually learned by practitioners within artificial, static, class-
room and/or training environments. They are seldom assessed in the contexts in which
practitioners must perform their roles, and frequently lack the nuances or the so-called
“real-world” knowledge and experience that veteran or seasoned strategic communi-
cation practitioners come to learn over their careers. That is one reason why not all
communication practitioners are strategic ones, and not all strategic communication
6 B U S I N E S S S T R AT E G Y

practitioners are compensated similarly. The best ones have earned the trust of their col-
leagues in the C-suite, and their value is recognized by earning lucrative compensation
among the organization’s other staff professionals, recognition as a valued contributor,
and the trust of their executives.

Strategic communication practitioners’ roles

and responsibilities at different strategy levels

Business strategy in today’s parlance is often thought of in terms of how it works at

different hierarchical levels. Thought leaders such as Carroll and Buchholtz (2015) have
suggested one schema that suggests there are four common, hierarchical levels at which
strategy could be developed. Each one of these four levels entails a different set of roles
and responsibilities for strategic communication practitioners, which are described in
the next section.
At the enterprise level, strategy concerns choices, decisions, and/or actions about the
larger, higher-order purpose and role of the organization in society. Questions decided
at this level refer to how the organization will prioritize different stakeholders’ demands
or needs, what it values in terms of its purpose, and how it will respond to the ethical
challenges it will inevitably face over time. For strategic communication practitioners,
contributing to enterprise-level strategy frequently means being asked to contribute
to, and participate in, activities such as corporate responsibility, stakeholder-related
activities like community engagement, government relations, investor relations, pub-
lic affairs, and regulatory affairs, among others. It also means that they should have
interaction with the organization’s governance function, as represented by its board of
directors, or those individuals who are legally responsible to the state and the organi-
zation’s owners for the organization and its activities.
At the corporate level, strategy is mainly concerned with choices about which
businesses, industries, or markets the organization is going to participate in and how
the larger (i.e., corporate) organization will add value to its chosen set of businesses.
This is often referred to as the “scope” element of business strategy, and includes
where (i.e., industries or markets) it will operate and to whom (i.e., customers, locales,
segments of the industry value chain) it will choose to serve. Strategic communication
practitioners often get involved at the corporate level when the organization or its
strategy will potentially put it into conflict with its stakeholders, causing perceived
or actual gaps in trust, otherwise known as issues, between the organization and its
stakeholders. Strategic communication practitioners can be among the most capable
and well-placed listeners within their organizations and also the most sensitive to
ethical concerns shared by others. They will need to use tools and techniques such
as:

• assessing, managing, and maximizing the organization’s reputation among its

stakeseekers (as articulated by Holzer, 2007) and stakeholders;
• employing a range of qualitative and quantitative research activities or methods to
gauge stakeholder reactions to actual or proposed strategic moves;
 B U S I N E S S S T R AT E G Y 7

• environmental scanning and monitoring of sectors impacting the organization,

both direct and indirect ones, current boundaries, and potential future ones;
• monitoring, tracking, and managing social media (SM) and organizational interac-
tions with SM audiences;
• serving as ambassadors by using communication modalities to introduce and famil-
iarize new stakeseekers and stakeholders with their organization. These groups may
take the form of communities, regions, government officials, or customers, and so
forth. They will usually want to better understand who the organization is, what its
purpose is in interacting with them, and the kinds of broadly defined impacts the
organization may have on their lives.

At the business level, the critical strategy question to be answered is how the orga-
nization should compete in a given business or industry—in other words, how it
will win. “Winning” is the ultimate dependent variable in business strategy, and
the range of independent variables encompass the many strategic choices made by
executives within the strategy process. The central focus of any strategy is the actions,
choices, plans, and decisions in the market place that executives take to improve
the company’s financial and market performance, to strengthen its competitive
position over time, and to gain and sustain a competitive edge over its rivals. Key
choices and decisions made at the business level of strategy are usually characterized
by:

• capital investment plans;

• longer-term (3–5+ years) business and strategic plans;
• mergers and acquisitions, joint ventures, and corporate alliance policies or plans;
• political and social risk assessments; and
• research and development planning.

A common set of generic strategies suggested by Porter (1979) suggested that a

business must make clear choices about how it will compete with respect to costs
and differentiation. Known as generic strategies, business organizations may choose
to compete as a low-cost provider across the wider range of industries/markets, or
choose a focus of being the low-cost provider to a specific niche or niches within those
markets. With respect to differentiation, the choice is whether the organization will
differentiate across the wide range of markets/industries, or focus itself on a limited
or selected set of niches. Porter noted that the failure to make a clear, enduring,
and specific strategy choice about this would lead a company to get stuck in the
middle, which he argued would cause it to perform less favorably to its more focused
rivals.
Business-level strategy may be the most important and least well understood of the
four levels that strategic communication practitioners must understand, participate in,
and contribute toward. Their primary role herein is to support, through communica-
tion, the strategy and execution of the strategy in the marketplace by their organizations.
Among other activities, they may help the business leaders craft, test, or integrate adver-
tising or marketing messages; develop supporting collateral for products or services;
8 B U S I N E S S S T R AT E G Y

organize events to help stakeholders gain more awareness of the organization and its
products/services; monitor and manage web communication with various stakehold-
ers; or manage internal communication with employees to ensure they appropriately
grasp their roles in, and ability to contribute to, the successful execution of the strategy
and assist in the achievement of desired outcomes (i.e., goals). All of these communica-
tion activities must reinforce and help develop better understanding of harmonization
and/or alignment of different groups within the organization, or between the organiza-
tion and its external audiences.
At the functional level, strategy refers to the plan developed for how to strengthen the
organization’s functions, including ones like communication, engineering, production,
or sales. Functional-level strategy also concerns how the organization will coordinate
these different functions. It also refers to how it will manage resources, processes, and
people in order to support the chosen business strategy by creating and sustaining what
are known as core competencies.
A competence is the ability, as measured by possession of required skills, knowledge,
qualifications, or capacity, of an individual to successfully perform a designated activ-
ity. For instance, strategic communication can be a competency. Prahalad and Hamel
(1990) described a core competence as going deeper and beyond a basic competence
in that these embody an organization’s collective learning and allow it to coordinate
diverse skills and integrate multiple abilities or resources into a wider variety of mar-
kets. Core competencies are seen as the central strengths or strategic advantages of the
business, substantially contribute to the benefits a company offers its customers, and
allow it to compete successfully. If those core competencies are hard for rivals to imi-
tate or acquire, they are known as distinctive competencies, and are ones upon which
businesses can lengthen their wielding of competitive advantage.
Communication practitioners interact with functional-level strategy in a number
of ways. First, and most directly, it is their role and responsibility to make sure that
the organization’s communication functions, its capabilities and resources are used
effectively in supporting its higher-level strategies. Second, strategic communication
practitioners provide and leverage unique communication resources and support to
those functions of the business organization that are central to its core competencies.
Third, strategic communication practitioners identify and fulfill the communication
needs and priorities of the other organizational functions, making sure that the
communication they engage with meets demonstrated standards and levels of practice
that enable these functions to be as effective as they are able to be.

The next generation of business strategy communication

Like organizations and the environments that encompass them, business strategy
constantly evolves, as does and should the communication dynamically associated
with supporting and making it effective. Tomorrow’s communication practitioners will
require newer, evolved, and extended sets of competencies to get a seat at, or to remain
at, the boardroom table. These new competencies may not look anything like the
contemporary ones being used today. Surely, the societal acclimation to, and uptake of,
 B U S I N E S S S T R AT E G Y 9

new information and communication technologies alone will compel the development
of new ones, and possibly in ways that are difficult for business strategists or communi-
cation practitioners to even fathom in their present VUCA-filled environments. They
will likely have to acquire them through experiencing the challenges that occur in that
cauldron that can be today and tomorrow’s challenging communication practice and
experience, and they will need to be quick learners, just like their organizations will
need to be if their business strategies are going to be successful.

SEE ALSO: Communication Strategy; Corporate Strategy; Decision Making; Prescrip-

tive Strategy; Sense-Making; Strategic Communication; Strategic Competencies; Strate-
gic Management; Strategic Planning; Strategic Readiness; Strategist Role (Public Rela-
tions/Communication)

References

Carroll, A., & Buchholtz, A. (2015). Business and society: Ethics, sustainability and stakeholder
management (9th ed.). Stamford, CT: Cengage Learning.
Holzer, B. (2007). Turning stakeseekers into stakeholders. Business & Society, 47(1), 50–67.
Porter, M. (1979). How competitive forces shape strategy. Harvard Business Review, 57
(March–April), 137–145.
Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business
Review, May, 79–91.

Further reading

Hamel, G., & Prahalad, C. K. (1994). Competing for the future. Cambridge, MA: Harvard Business
Review Press.
Lafley, A., & Martin, R. (2013). Playing to win: How strategy really works. Cambridge, MA:
Harvard Business Review Press.
Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. J. III. (2015). Crafting and executing
strategy: The quest for competitive advantage. Concepts and cases (20th ed.). New York, NY:
McGraw-Hill Education.

Craig S. Fleisher, PhD, is the Chief Learning Officer at the strategy consultancy Aurora
WDC, Madison, Wisconsin. A former dean, university research chair holder, and
professor at several North American universities, he holds graduate faculty status in
the EMScom, Universita della Svizzera Italiana (Switzerland), and Tampere University
of Technology, Finland. Author of 14 books and over 150 scholarly papers, he is a life
member of the International Association of Business Communicators, was president of
a Canadian public affairs association, a U.S. foundation, and an international strategy
association. Today, he speaks around the globe on strategy topics and advises dozens
of the world’s leading brands across numerous industries.

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