What is Strategy?

The term Strategy was introduced into the business paradigm after 1960. Primarily it dealt with military strategy only. The four decades initiating from 1960 marked a distinctive evolution of “strategy” across the globe. It all started with the Sloan School of Thought affirming the philosophy of profit maximization, Alfred Chandler’s perspective of organization structure and Ansoff’s planning framework. The 1970s and early 1980s experienced two major oil shocks and de-industrialization in major economies, making the future look too bleak. However, in this decade the Boston Consulting Group (BCG) lead the way with strategic optimism with a notion to shape the future at times of crisis. Michael Porter during the 80s opined on external environment of a business, but the major failures in businesses during this period led to the perusal of the internal environment of a business in the 1990s and the resource based views of competitive advantages became omnipresent. The period after Y2K dealt with chaos approach that outlined a strategic and holistic approach to crisis management.

Strategy is being circumscribed by two boundary marks: What to do? & What not to do? The strategy formulation is based on Where do we compete? & How do we compete? Finally the mode of How do we execute form the fundamental questions in strategy.

Talking about strategy leads to market opportunities. Some principles of market opportunity are:

·         It is the opportunity for any particular firm, but not for others

·         It is not a differentiator

·         Newly identified need or a demand trend that can be exploited by a firm

·         Not always dealing with competitors and the market competition

It can happen sometimes that one individual wants to revive a dead opportunity. To excel in this scenario one must focus on turning the non-buyers to buyers or identify the segment of citizenry who are willing to pay. However, thinking about an opportunity should not be linked with the constraints that can arise while creating the opportunity. Here one might inject in the concept of resource, which is nothing but the constraint based on market opportunity.

In conclusion, Strategy can be defined by the following loop:

Market Opportunity -----> Resources -----> Execution (Role)

Contributed By:
Bitan Banerjee

Section A
Strategic Management
Class of 2013-15