What is Strategy Anyway?

by Richard W. Oliver

On the face of it, defining “busi- ness strategy” seems like a no-brainer. Yet when I was confronted with the challenge recently in a faculty meeting, I found myself rather less than articulate. “Bad form!” you might say, for a pro- fessor of the subject and more impor- tantly, a columnist on strategy.

Okay, so you got me. But before you get too critical dear reader, how about taking a shot at it yourself?

… I’m waiting …

Ah, see what I mean? It’s not as easy as it might at first appear. The fact is, there are many definitions of strategy, some are highlighted here.

Defining Strategy

Well, I finally got my act together and will share with you now my humble (and brief) contribution to the strategy definition debate:

Strategy is understanding an industry structure and dynamics, determining the organization’s relative position in that industry, and taking action to either change the industry’s structure or the organization’s position to improve organizational results.

This definition encompasses all the major activities undertaken in the strategy process and should focus practitioners and scholars alike on what’s important (i.e., what drives the amount and nature of corporate success). Industry structure and dynamics determine the broad para- meters of growth and earnings poten- tial and delimit what is realistically possible to achieve. The firm’s relative position in a given industry structure sets its specific achievement profile and the scope of its strategic options. Finally, industry or organizational change defines the specific organizational responses to its strategic (structural and positional) circumstance and aspirations.

While no definition is perfect (and granted, this one suffers from lack of detailed specifics when compared to some of those offered in the list that appears later), it does offer the practi- tioner a general place to start in determining an approach that a par- ticular firm might use.

To help broaden your thinking about the definition of strategy, I offer a brief review of the history of strategic thinking.

Download the full article here