So What Is a Strategy Anyway?

By Lon W. Schiffbauer, BA, MBA, PhD, SPHR

“Strategy” is one of those words you know, but not really. I mean, you know what it means and can use it in a sentence, but can you define it?

A strategy is the method by which a company intends to win in the marketplace. It’s a deliberate, purposefully-developed course of action made in advance of any decisions or actions taken on the tactical level (Mintzberg, 1987). Strategies are developed by comparing your competitive position to that of others in the marketplace and determining how you can best compete and win in that ecosystem. Strategies are built upon the company’s core competencies and competitive position in the industry. A capability possessed by an organization that cannot be easily matched or substituted by a competitor, giving the organization a competitive advantage in the marketplace.

What You Need to Understand Before Determining the Best Strategy

A strategy is not something you just pick from a menu. As mentioned earlier, strategies are deliberate, purposefully-developed course of action built upon your company’s core competencies and competitive position. This all means that the best strategy is discovered by analyzing your and your competitors’ positions in the ecosystem. However, before you can even begin to suss out the right strategy for your organization, you first need to learn all you can about everything that comprises your industry’s ecosystem. Here are some steps you can take to do this:

Develop an understanding of the industry, market, resources, technology, and regularity trends and their implications for the organization.

  • Identify the external factors that govern the industry. External factors are thing which you cannot control to any significant degree but which profoundly influence your industry, things like industry trends, emerging competitors, technology, customer needs and expectations, the availability of resources, and governmental regulations.
  • Likewise, identify and understand the internal factors at play. These are things that are part of your organization and therefore can be controlled or perhaps just influenced to some degree. These are things such as work processes, leadership development, recruiting and retention, and business practices.
  • Continually scan the environment to see what competitors are doing, what customers are demanding, and where the industry is going. Listen to what your customers are saying and examine how competitors are responding to these needs.

Develop an understanding of your customer value proposition. Learn all you can about your customers’ needs and how your products or services meets these needs. As you do so, consider the following:

  • What are your customers’ needs today, and how might they evolve in the future?
  • What are the key factors that drive their decision-making when choosing a product or services?
  • How do your customers view you in relation to your competitors? How do they compare the value you offer versus that of your competitors?
  • What differentiates you from the competition in the eyes of your customers?
  • What do your customers wish you would to better meet their current and evolving needs?
  • What could your competition do to better meet their needs?

References

Gebelein, S.H. (2010). Successful manager’s handbook: Develop yourself, coach others (8th ed.). PDI Ninth House.

Mintzberg, H. (1987) Crafting strategy. Harvard Business Review, 65, 66-75.

Lon is an Associate Professor of Business Management at Salt Lake Community College and holds an MBA, a PhD, and is a certified Senior Professional in Human Resources (SPHR). In addition to his academic background, Lon spent close to 30 years working and consulting for such companies as FedEx, Intel, eBay, and PayPal, as well as a variety of small to mid-sized companies around the world.