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What is strategy?
It is possible to define strategy as a plan of action to achieve short, middle and long term desired goals. Depending on the context, strategy meaning can change drastically. This strategy definition is not only applicable to business performance, but also in other fields.

What is strategy?
It is possible to define strategy as a plan of action to achieve short, middle and long term desired goals. Depending on the context, strategy meaning can change drastically. This strategy definition is not only applicable to business performance, but also in other fields.

What is strategy in business?

There are generally three hierarchical 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. Functional strategies are the third type of strategy. A functional strategy is about the strategic goals to achieve the business goals, and to keep developing the functional area itself.

In business, it is possible to define strategy as a plan of action to achieve improvement goals in several aspects of an organization or company. Strategy can be used to for example improve profits, customer satisfaction and efficiency. In this use, strategy meaning a plan for improvement can be viewed. This shows that strategy is a versatile concept, even in the sole area of business.

How does strategy function?

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 in the strategy. A great example of a tool that assists in determining a strategy in this aspect is the 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, strategy 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.

Tools to improve strategy

Today’s modern business and markets act on a planning from dynamic strategies. Companies and organizations need to have strategy 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.

All strategy tools are aimed at improvement of business performance. A strategy can be modeled after a tool, but the resulting strategic plan should still suit the business. Every business or organization has a unique identity, set of values and work process. A strategy is effective if these aspects are considered as well.

In order for companies to be unique in business, competitive strategy is also applied. Competitive strategy can be a part of strategic management to develop a unique aspect in a business. Competitive strategy aims to create a competitive advantage. If a company follows such a strategy, it is possible for the strategy to lead to a unique place in the market. In order for a business to develop in the way that the strategy plan estimates, a strategy will consist of business approaches and initiatives.

From strategy to strategic plan

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

Strategic Triangle (Ohmae)

August 6th, 2023

Strategic Triangle: this article explains the Strategic Triangle by Kenichi Ohmae in a practical way. Next to what it is, this article also highlights the three components and what is Hito Kane Mono. After reading you will understand the basics…

EFE Matrix / IFE Matrix explained

August 4th, 2023

EFE matrix: this article explains the EFE matrix and the IFE matrix in a practical way. Next to what this matrix is, the article also highlights the external and internal factors, the weights, a step-by-step plan and the advantages. After…

Balanced Scorecard explained

August 2nd, 2023

Balanced Scorecard: this article explains the Balanced Scorecard, developed by Robert Kaplan and David Norton, in a practical way. It offers an explanation of what a BSC is and how it can be implemented. It also contains a downloadable…

Contingency Plan explained

July 26th, 2023

Contingency Plan: this article describes the concept of a Contingency Plan in a practical way. It cover what a business disaster and a contingency plan are, what the components of a contingency plan are and who makes the plan. It…

INK Management Model

July 5th, 2023

INK Management Model: this article explains the INK Management Model in a practical way. This article contains the definition of the INK Management Model, its 10 focus areas and practical examples. After reading you will understand the basics of this…

Big Hairy Audacious Goal (BHAG)

July 4th, 2023

Big Hairy Audacious Goal: this article explains the concept of Big Hairy Audacious Goal (BHAG), developed by Jim Collins and Bertil Ohlin in a practical way. Next to what it is (meaning and origin), this article also highlights the…

Chaos Theory explained

June 26th, 2023

Chaos Theory: this article explains the concept of Chaos Theory in a practical way. In addition to what it is, this article also explains the decision, the uncertain environment, the rapid adaptation and the permanent revolution, based on this theory.…

Abell model explained

June 22nd, 2023

Abell Model: this article explains the Abell Model or Abell Framework, developed by Derek Abell in a practical way. After reading you will understand the basics of this powerful strategy tool. What is the Derek Abell model? What…

SOAR Analysis explained plus example

June 19th, 2023

SOAR Analysis: this article explains the SOAR Analysis in a practical way. Other highlights include: a comparison of the SOAR and SWOT Analysis, a closer look at SOAR and the execution of this analysis. Lastly, this article also contains a…

Porter Five Forces model explained

June 10th, 2023

Porter Five Forces Model: this article explains Porter Five Forces Model, developed by Michael Porter in a practical way. After reading you will understand the basics of this powerful competitive advantage analysis. What is the Porter Five Forces Model?…
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