What Do We Mean by “Strategy”?
A company’s strategy is defined by the specific market positioning, competitive moves, and business approaches
that form management’s answer to “What’s our plan for running the company and producing good results?”
A strategy represents managerial commitment to undertake one set of actions rather than another in an effort
to compete successfully and achieve good performance outcomes.1 This commitment incorporates a coherent
collection of choices and decisions about:
- How to attract and please customers.
- How to compete against rivals—and, ideally, gain a competitive advantage as opposed to being hamstrung
by competitive disadvantage.
- How to position the company in the marketplace vis-à-vis rivals.
- How to pursue attractive opportunities to grow the business.
- How best to respond to changing economic and market conditions.
- How to manage each functional piece of the business (e.g., R&D, supply chain activities, production,
sales and marketing, distribution, finance, and human resources).
- How to achieve the company’s performance targets.
Identifying a Company’s Strategy
The best indicators of a company’s strategy are its actions in the marketplace and senior managers’ statements
about the company’s current business approaches, future plans, and efforts to strengthen its competitiveness and
performance. Figure 1.1 shows what to look for in identifying the key elements of a company’s strategy.
Arthur A. Thompson
The University of Alabama