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Strategy

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.

Business Model Wheel

May 12th, 2022

Business Model Wheel: this article provides a practical analysis of the Business Model Wheel. After reading, you’ll understand the basics of this powerful strategic tool. What is the Business Model Wheel? The Business Model Wheel is a practical tool to…

MOST Analysis

May 12th, 2022

MOST Analysis: this article provides a practical explanation of the MOST Analysis. After reading, you’ll understand the basics of this powerful strategy tool. What is the MOST Analysis? The MOST Analysis is an analytical technique that is used for strategic

Hoshin Kanri Matrix

May 2nd, 2022

Hoshin Kanri Matrix: this article explains the Hoshin Kanri Matrix in a practical way. After reading you will understand the basics of this powerful strategy tool. This article also contains a downloadable and editable hoshin kanri matrix excel template

McKinsey Three Horizons of Growth

May 2nd, 2022

McKinsey Three Horizons: this article explains the Mckinsey Three Horizons of Growth model in a practical way. After reading it, you understand the basics of this strategy tool. What is the McKinsey Three Horizons of Growth model? The American consultancy…

Business IT Alignment

May 2nd, 2022

Business IT Alignment: this article explains Business IT Alignment in a practical way. After reading you will understand the basics of this powerful management and strategy tool. What is Business IT Alignment? Business IT Alignment is about using information…

Levers of Control model

May 2nd, 2022

Levers of Control: this article explains the Levers of Control model, developed by Robert Simons, in a practical way. After reading it, you understand the basics of this strategy and management related tool. What is the Levers of…

SPACE Analysis

May 2nd, 2022

SPACE Analysis: this article explains the SPACE Analysis model in a practical way. After reading it, you understand the basics of this strategy tool. What is the SPACE Analysis? A SPACE Analysis makes it easier for upper management to make…

Organizational Network Analysis (ONA)

May 2nd, 2022

Organizational Network Analysis: this article provides a practical explanation of Organizational Network Analysis (ONA). After reading, you’ll understand the basics of this powerful communication tool. What is Organizational Network Analysis (ONA)? Organizational Network Analysis (ONA) is a structured method to…

EFE / IFE matrix

May 2nd, 2022

EFE matrix: this article explains the EFE matrix and the IFE matrix in a practical way. After reading it, you understand the core of this strategy methodology. About the EFE matrix and the IFE matrix The EFE and IFE matrices…

Grand Strategy Matrix

May 2nd, 2022

Grand Strategy Matrix: this article explains the Grand Strategy Matrix in a practical way. After reading it, you understand the basics of this strategy tool. What is the Grand Strategy Matrix? It is good for companies to know which strategies…

CAGE Distance Framework

May 2nd, 2022

This article provides a practical explanation of the CAGE Distance Framework, often referred to as simply the CAGE Framework. After reading, you’ll understand the basics of this powerful strategy method. What is the CAGE Distance Framework? The CAGE…
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