Strategy- Meaning, Features, Essence & Importance
The word ‘strategy’ has entered in the field of management from the military services where it refers to apply the forces against an enemy to win a war. The word “strategy” came from the two Greek words i.e. Stratus (Army) and Agein (to lead). The Greeks felt that the strategy making is one of the responsibilities of the Army General. This concept today adopted even in the business. The dictionary meaning of strategy is “the art of so moving or disposing the instrument of warfare as to impose upon enemy, the place time and conditions for fighting by one self”.
In management, the concept of strategy is taken in more broader terms. In simple terms, strategy means looking at the long-term future to determine what the company wants to become, and putting in place a plan, how to get there. Strategy is both art and science. Strategy is an art because it requires imagination, sensitive thinking, and an capability to visualize the future, and to encourage and connect those who will apply the strategy. Strategy is science because it requires analytical skills, the ability to organize and analyze information and take well knowledgeable decisions. Without a strategy, an organization is meaningless and weak to changes in the business environment. Strategy acts as some kind of a guidepost for a company’s ongoing development. Strategy provides a direction for the company and indicates what must be done to survive, grow and be profitable.
Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.
A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vacuum and that any act taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers.
Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need to take into consideration the likely or actual behavior of others. Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large.
Essence of Strategy
Strategy is characterized by four important aspects:
- Long term objectives
- Competitive Advantage
Features of Strategy
Foresee the future-
Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment.
Long term developments-
Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future.
Strategy is created to take into account the probable behavior of customers and competitors. Strategies dealing with employees will predict the employee behavior.
Importance of Strategy
A successful strategic plan does the following:
Provides Direction and Action Plans:
It establishes in a clear, concise and strategically sound way the direction for the organization how this will be achieved, including detailed action plans.
Prioritizes and Aligns Activities:
Strategic planning is about making choices, establishing priorities, allocating resources to strategic initiatives and coordinating to achieve desired results.
It defines clear lines of accountability and timelines for achieving expected results on the agreed strategic initiatives.
Enhances Communication and Commitment:
In clarifying the vision and accountabilities, the strategic plan increases the alignment of all organizational activities and fosters commitment at all levels.
Provides a Framework for Ongoing Decision Making:
Since all decisions should support the strategy, the strategy and the strategic initiatives are the reference point for decision-making.
You have to have a plan for day to day business, but you also need to spend time looking and listening to the changes that are happening in your industry. It is a matter of having both a daily plan to get things done.
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