What is Strategy?

Cite this article as:"What is Strategy?," in The Business Professor, updated July 18, 2014, last accessed June 2, 2020, https://thebusinessprofessor.com/lesson/what-is-strategy/.
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Strategy and Strategic Resources

http://youtu.be/Tgbim75-tEI Back To: BUSINESS STRATEGY What is Strategy? Summary: Business strategy is a planned approach toward a commercial activity. It involves the direction of the organization in achieving a short-term goal or long-term mission. Strategy considers the use or configuration of re

Back To: BUSINESS STRATEGY

What is Strategy?

Summary: Business strategy is a planned approach toward a commercial activity. It involves the direction of the organization in achieving a short-term goal or long-term mission. Strategy considers the use or configuration of resources within the business environment to achieve an intended goal. It is not specific actions, rather it is a general method of approaching the business activity in order to achieve an intended outcome or goal. A strategy is largely mental and it entails approaching each business task (operations, marketing, sales, financing, etc.) from this strategic perspective. A strategy employs tactics, which are the actual tasks or procedural maneuvers used to achieve a strategic objective.

Strategy can be understood as a process or general orientation toward achieving an intended outcome. The strategy is drawn from a purpose and provides direction in carrying out that purpose. Perhaps the best way of defining strategy is by comparing it to tactics. If a person wants to achieve an objective, they will develop an approach for achieving that objective. The individual actions the individual takes in furtherance of achieving that objective are tactics. Here are some examples to illustrate the distinction between strategy and tactics:

  • I am in a negotiation with you. I know that I will need to uncover specific information about your bargaining position. I then plan on using that uncovered information to persuade you to see my point of view. Uncovering information with the objective of persuading is a strategy. My tactic in the initial strategy may be to get you intoxicated and talking haphazardly.
  • An alternative strategy would be to leverage your lack of information and attempt to coerce you against your will. In this scenario, my tactic may be to lie about information and threaten to expose that information if you do not comply with my demands.

In summary, a strategy is a planned course of action that is general in nature, but the purpose of the course of action is clearly understood. A tactic is an individual action taken as part of that general plan.

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