WHAT IS STRATEGY?
What is the criterion for defining a strategy?
How do you set a long-term strategy?
(Translated by Google Translate)
Is there a criterion to define what is meant by strategy?
When discussing strategies, a major difficulty is precisely because many people use that word with different meanings. This should not, however, surprising: an economist sees the problem in a way, a specialist in organizational behavior in another.
Let us examine, therefore, the definitions given by some authors who follow the same line of thought:
- Chandler (1962): definition of the objectives of long-term development activities and allocating resources to achieve these objectives
- Glueck (1980): an integrated plan, unified and comprehensive with the purpose of ensuring that the basic objectives of the company are achieved
- Rumelt (1980): a set of policies and plans that, taken together, define the objectives of a company and its approach to survival and success. Alternatively, we could say that the policies, plans and objectives of an express its strategy to deal with an increasingly complex competitive environment
- Andrews (1980): the model of decisions with which a firm determines its objectives, formulating policies and plans for achieving them, shall in such business to operate as an organization wants to build, the nature of the economic benefits and economic planning to to its shareholders, employees, customers and local communities
These are concepts that have in common a number of elements:
- the definition of objectives in the long term
- the development of actions aimed at guiding the management of companies towards the objectives
- acquisition and allocation of resources to build and defend advantages over competitors
In particular, Andrews'definition shows that the strategy is a set of decisions that combine the capabilities and resources of a company with the opportunities of the environment and that an objective is to add value not only for shareholders, but also for other people or other groups of people who have an interest in the enterprise (stakeholders).
In the early nineties began to emerge more uniformity in the definition. According Wheelen and Hunger (1993), the strategy is something about the determination and evaluation of alternative pathways to achieve the mission and goals of long-term viability and the choice of routes to follow.
According to Johnson and Scholes (1999), the strategy is the orientation of the long term by which the organization aims to build competitive advantages by combining resources in an environment that changes constantly, with the ultimate goal of responding to market needs and stakeholders.
The focus is therefore on the characteristics of strategic decisions. Typically these decisions are taken only a few times in the history of the company, have a long-term and complex nature, rarely follow previous experience; resorted require considerable and great commitment from the management. The stakes are therefore high.
One way to define the strategy is also to say what is not. For some, such as Porter (1997), Quality, customer satisfaction and time-to-market implemented to achieve greater operational efficiency are not just strategies but for ways to do things better than others.
Strategy is to choose between conflicting solutions. According to Porter: "The strategy comes from doing things differently than rivals ... Strategy is trade-off is deciding what to do and what not to do."
All firms must provide quality, customer satisfaction and time to market: strategy is, for example, the deliberate choice not to respond to a group of customers or means to decide which needs answering.
If one accepts this premise, we reach a second conclusion: the efficiency of operational management may eventually be imitated by rivals. Successful firms compete, then, in another way, they do things so that it is difficult to imitate.