Sunday, March 18, 2018

Tools for Strategy | What is Strategy?

The Three Levels of Strategy

You've probably heard the term "business strategy" used in the workplace.
But what is strategy, exactly?
And are you aware that you need different types of strategy at different levels within your organization?
In this article, we're looking at some common definitions of strategy. We'll focus on three strategic levels – corporate strategy, business unit strategy, and team strategy – and we'll look at some of the core tools and models associated with each area.

Mapping Out Your Best Possible Direction
Strategy is the art of working out how you'll "win" in business and in life.
This section of Mind Tools teaches more than 75 individual strategy skills, ranging from simple situational analysis techniques to tools that can help you craft a unique and successful competitive position.

Defining Strategy
Strategy has been studied for years by business leaders and by business theorists. Yet, there is no definitive answer about what strategy really is.
One reason for this is that people think about strategy in different ways.

At each level, though, a simple definition of strategy can be: "Determining how we are going to win in the period ahead."
Gerry Johnson and Kevan Scholes, authors of "Exploring Corporate Strategy," say that strategy determines the direction and scope of an organization over the long term, and they say that it should determine how resources should be configured to meet the needs of markets and stakeholders.
In turn, each team should have its own strategy to ensure that its day-to-day activities help move the organization in the right direction.
We'll now look more deeply at each level of strategy – corporate, business unit, and team.

Team Strategy

To execute your corporate and business unit strategies successfully, you need teams throughout your organization to work together. Each of these teams has a different contribution to make, meaning that each team needs to have its own team-level strategy, however simple.
This team strategy must lead directly to the achievement of business unit and corporate strategies, meaning that all levels of strategy support and enhance each other to ensure that the organization is successful.

Corporate Strategy
In business, corporate strategy refers to the overall strategy of an organization that is made up of multiple business units, operating in multiple markets. It determines how the corporation as a whole supports and enhances the value of the business units within it; and it answers the question, "How do we structure the overall business, so that all of its parts create more value together than they would individually?"
Corporations can do this by building strong internal competences, by sharing technologies and resources between business units, by raising capital cost-effectively, by developing and nurturing a strong corporate brand, and so on

Business Unit Strategy
Strategy at the business unit level is concerned with competing successfully in individual markets, and it addresses the question, "How do we win in this market?" However, this strategy needs to be linked to the objectives identified in the corporate level strategy.