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What is the definition of Strategy?

Strategy is a plan of action to achieve short, middle and long term desired goals.

What is the definition of Strategy?

Strategy is a plan of action to achieve short, middle and long term desired goals.

There are generally three types of strategies in business. The corporate strategy defines the strategic goals of the overall company. The second type of strategy, the business strategy, establishes the strategic goals for a business unit. The functional strategies are about the strategic goals to achieve the business goals, and to keep developing the functional area itself.

Goals are important for organizations to determine the future direction of a company. A good strategy always stems from a thorough analysis of the company’s position in the market. This is where a company’s strengths and weaknesses, as well as opportunities and threats are incorporated (SWOT analysis).

The usefulness of an effective strategy (importance) does not stop with providing direction for management and employees. In addition to its function as a North Star, also plays an important role in the decision-making process. For organizations that have an adequate understanding of their strengths and weaknesses, the strategy helps managers decide where best to spend efforts and resources.

Today’s modern business and markets act on a planning from dynamic strategies. Companies and organizations need to have to survive, save their market position and expand with new products and customers. Various tools exist to support this process. For example, the CAGE Distance Framework is used to identify important differences between countries that companies should take into account when developing the strategy. The McKinsey Three Horizons of Growth model helps companies avoid a gap between what a company wants to achieve in the future and where it is now in relation to its strategy.

A strategy charts the course of a business. There are many theories and methods that orient themselves towards the best one. It’s always about the best fit and the commitment that’s required to make it successful. An example of this are the 5 Ps of Strategy by Henry Mintzberg. Kenichi Ohmae’s 3C model focuses on the three key factors for success that must be balanced in the form of a strategic triangle.

A strategy is usually translated into a strategic plan. The strategic plan consists of five elements, namely vision-mission, objectives, core values, KPIs (Key Performance Indicators) and policy & responsibility. The vision and mission align an organization. In this way, people in the organization can join forces to increase efficiency. A company’s core values reflect what it is good at and what it is proud of. A plan is furthermore nothing without well-defined objectives, the fourth part of a strategic plan. Suitable KPIs are selected to monitor progress towards the objectives.

There have been lots of scientific and practical studies on this topic by Michael Porter, C. K. Prahalad, Gary Hamel and many more, from a learning and developing point of view. Michael Porter in particular has become known for his vision of strategy. According to him, a strategy is aimed at cost leadership, differentiation and focus. These strategies are known as Porter’s three generic strategies. Porter’s strategies basically describe the trade-off of strategies between cost minimization, product differentiation strategies and market focus.

Strategy methods, theories and tips

What are the most known and used theories and management models? What are their success stories and practical tips when you apply these? These posts are all about great tools and methods that can help you to achieve your goal or understand certain aspects that come with strategic planning.

Kraljic Portfolio Purchasing Model

August 11th, 2022

Kraljic Portfolio Purchasing Model: this article explains the Kraljic Portfolio Purchasing Model in a practical way. After reading you will understand the basics of this powerful purchasing strategy tool. What is the Kraljic portfolio purchasing model? In 1983, Peter Kraljic

McKinsey Growth Pyramid

July 29th, 2022

McKinsey Growth Pyramid: this article explains the McKinsey Growth Pyramid in a practical way. After reading it, you understand the core of this strategy theory. What is the McKinsey Growth Pyramid? American organisational consulting agency McKinsey has developed quite a…

OGSM Framework

July 15th, 2022

OGSM Framework: this article provides a practical explanation of the OGSM Framework. After reading, you’ll understand the basics of this powerful strategy tool. The tool was popularised by Proctor & Gamble, and can be applied to an entire…

Business Motivation Model (BMM)

July 8th, 2022

Business Motivation Model: this article explains the Business Motivation Model (BMM) in a practical way. After reading it, you understand the core of this strategy theory. What is the Business Motivation Model (BMM)? In 2000, the American Business Rules Group…

ADL Matrix

July 4th, 2022

ADL Matrix: this article explains the ADL Matrix, developed by Arthur D. Little, in a practical way. After reading you will understand the basics of this powerful strategy tool. What is the ADL Matrix? To gain more…

Hedgehog Concept (Collins)

July 3rd, 2022

Hedgehog Concept: this article describes the concept of the Hedgehog Concept by Jim Collins in a practical way. After reading you will understand the definition and basics of this powerful strategy tool. What is the Hedgehog Concept? The Hedgehog Concept…

SMaC Recipe (Collins & Hansen)

July 3rd, 2022

SMaC Recipe: this article provides a practical explanation of the SMaC Recipe. After reading, you’ll understand the basics of this powerful strategy tool. What Is the SMaC Recipe? SMaC is a recipe for converting defined strategic business plans…

Five Stages of Decline (Collins)

July 3rd, 2022

This article explains the five stages of decline described by Jim Collins in a practical way. After reading, you’ll understand the basics of this powerful strategic tool. What are the five stages of decline by Jim Collins? The five stages…

Flywheel Concept (Collins)

July 3rd, 2022

Flywheel Concept: this article describes the Flywheel Concept, created by Jim Collins, in a practical way. After reading you will understand the definition and basics of this powerful strategy tool. What is the Flywheel Concept? A flywheel…

SWOT Analysis

June 23rd, 2022

SWOT Analysis: this article explains the SWOT Analysis in a practical way, including an example and template. After reading you will understand the basics of this powerful strategy tool to grow your business. This article also contains a downloadable and…

Carter’s 10 Cs of Supplier Evaluation

May 12th, 2022

Carter’s 10 Cs of Supplier Evaluation: this article provides a practical explanation of Carter’s 10 Cs of Supplier Evaluation. After reading, you’ll understand the basics of this powerful Supplier Evaluation method. What are the Carter’s 10 Cs of Supplier…
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