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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.

Ansoff Matrix

January 17th, 2022

Ansoff Matrix: this article explains the Ansoff Matrix by Igor Ansoff in a practical way. After reading you will understand the basics of this powerful marketing strategy tool. Introduction “Stagnation means decline.” This is a significant starting principle for both…

VMOST Analysis (Harnish)

December 18th, 2021

VMOST Analysis: this article explains the theory of the VMOST Analysis, developed by Verne Harnish in a practical way. After reading it, you understand the core of this strategy theory. What is a VMOST Analysis? The VMOST Analysis, also…

Organizational Life Cycle (Adizes)

November 16th, 2021

Organizational Life Cycle: in this article you will find a practical explanation of the Organizational Life Cycle theory by Ichak Adizes. After reading this, you will know the basic concepts of this powerful tool. Ichak Adizes’s Organizational Life Cycle theory…

Revenue Model Framework

July 8th, 2021

What are the different ways my organization can generate income? Key Definitions All organizations need money to function and therefore require means to generate sufficient income. An organization’s revenue model is the specific manner by which it acquires these funds…

Porter’s Five Forces Model

July 2nd, 2021

Porter’s Five Forces Model: this article explains Porter’s 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’s Five Forces Model?…

Digital Platform Map

June 13th, 2021

What is a digital platform and can one emerge in my industry? Key Definitions A platform is any type of system that facilitates many-to-many interactions (M2M). An example of a platform in the physical world is a marketplace, as it…

Teece’s Win-Lose Innovation Model

January 23rd, 2020

Teece’s Win-Lose Innovation Model: this article explains Teece’s Win-Lose Innovation Model in a practical way. After reading, you’ll understand the basics of this powerful strategy tool. What is Teece’s Win-Lose Innovation Model? Teece’s Win-Lose Innovation Model describes the required…

PMESII-PT Analysis

March 23rd, 2019

PMESII-PT is an acronym developed in the army of the United States and stands for Political, Military, Economic, Social, Information, Infrastructure, Physical Environment, and Time. PMESII-PT is a tool that is used to help users organise large amounts…

INK Management Model

April 22nd, 2014

This article explains the INK Management Model in a practical way. After reading you will understand the basics of this powerful management and strategy tool. What is the INK Management Model? The Instituut Nederlandse Kwaliteit (INK (Institute for Dutch…
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