Strategy is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. It involves setting goals and priorities, determining actions to achieve the goals, and allocating resources to accomplish them. Strategy is important because the resources available to achieve goals are usually limited.
There are different types of strategy, including corporate strategy, business strategy, and operational strategy. Corporate strategy refers to the overall strategy of an organization that is made up of multiple business units, operating in multiple markets. Business strategy is the strategic initiatives a company pursues to create value for the organization and its stakeholders and gain a competitive advantage in the market. Operational strategy, on the other hand, is concerned with how a company can improve its operations to achieve its goals.
According to Michael Porter, the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match. This is in contrast to operational effectiveness, which is necessary to superior performance but not sufficient because its techniques are easy to imitate.
In summary, strategy is a general plan to achieve long-term goals under conditions of uncertainty. It involves setting goals, determining actions to achieve them, and allocating resources to accomplish them. There are different types of strategy, including corporate, business, and operational strategy. The essence of strategy is choosing a unique and valuable position that is difficult to match.
