When you hear the word strategy, what comes to your mind? It could mean the coach of a football team, planning how to win a match. Or an army planning how to defeat an enemy. This is similar in the business world. However, strategy is more of long-term stuff than in a forty-five-minute game.
Definition of Strategy
Strategy is the set of methods an individual, a business owner, or a team of directors plans to use to achieve their goals. It is the course of actions or decisive activities performed within a long period to achieve an organization’s goals.
Strategy is the set of methods. The individual or organization must plan the methods to use in achieving its goals. Planning is a core part of a strategy. Strategic planning involves writing out a budget and forecast of what you want to achieve. For example, if a business goal is to position itself as a market leader. Then, the management of the team must set out a plan to achieve it. The plan will be more than a year.
Here, the management team will decide what methods it will deploy to compete with competitors. Should it practice market penetration or skimming? How will it source funds to meet the demand for goods or services?
It involves achieving goals. The main aim of a strategy is the achievement of a goal. An entity may have several goals. But the main goal of every business is to increase profit. Goals are different from objectives. While objectives are short-term, goals are for a long time. Aside from profit, a business goal can be satisfying customers’ needs, maximizing shareholders’ wealth, providing support to the community where the business operates (corporate philanthropy), and more.
Strategy is about where an entity is right now and where it plans to be in the next five to ten years. Therefore, it is about setting long-term goals. Becoming a market leader cannot take a year. Making more profit takes time. And building a reputation is not a day’s job. This implies that thinking long-term is the main aim of strategy.
Strategy is the way an entity plans to achieve its goals. It is mostly in the long term. And involves several methods and activities to achieve the set goals. In all, it is a core part of a top management job.