What is Strategy? Review Notes

A company's strategy consists of business approaches and competitive moves that top managers employ to attract and please customers, compete successfully, and achieve organizational objectives.

In crafting a strategy, the management declares, among all the paths and actions available to us, we have decided to focus on these customer needs and markets, compete in this fashion, allocate our resources and energies in these ways, and rely on these particular approaches to doing business. A strategy is managerial choice among alternatives adn signals organizational commitment to specific products and services, markets, competitive approaches, and ways of operating.

Business model is the term now widely applied to the revenue - cost detail of a firm. This provides the actual revenue streams through various products and services and the associated cost stream, profit margins and return on Investment. This model is provided for future estimates also. Every strategic alternative is to be converted into business model and checked for its profitability.

Five Tasks of Strategic Management

1. Forming the vision for the future. Where we want to be in the next 10 years in line with our objectives and mission.

2. Setting Goals for the near planning period - Converting the 10 years vision into current year goals.

3. Crafting a strategy to achieve the goals in the current that support the 10-year vision.

4. Organizing the resources in line with the strategy (Implementing the resource acquisition and allocation strategy).
5. Execution: Evaluating the daily performance and assessing its impact on annual plan and initiating adjustments in department levels plans as well as company level plans.

Crafting Executing Strategy: Text and Readings
Thomspon and Strickland, 12th Edition, 2001

Prof Rumelt on Strategy - Video Interview

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