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Strategy
Analysis methods Strategy • Strategic management Military strategy • Strategic studies Strategic planning • Strategic thinking Decision theory • Game theory
Major thinkers Michael Porter  • Rita Gunther McGrath Bruce Henderson  • Gary Hamel Candace A. Yano  • C. K. Prahalad Jim Collins  • Liddell Hart Carl von Clausewitz  • Sun Tzu Julian Corbett  • Alfred Thayer Mahan J.C. Wylie  • Adrian Slywotzky Sharon Oster  • Chris Zook Henry Mintzberg
Concepts Business model  • Competitive advantage Value chain  • Performance effects Core competency • Generic strategies Mission statement
Frameworks and tools SWOT • Five forces Balanced scorecard • Ansoff matrix OGSM • Managerial grid model PEST analysis • Growth–share matrix STP • MECE principle Business Model Canvas • Kraljic matrix Strategic Grid Model • Strategy map • VRIO
v t e

Strategy (from Greek στρατηγία stratēgia, "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. In the sense of the "art of the general", which included several subsets of skills including military tactics, siegecraft, logistics etc., the term came into use in the 6th century C.E. in Eastern Roman terminology, and was translated into Western vernacular languages only in the 18th century. From then until the 20th century, the word "strategy" came to denote "a comprehensive way to try to pursue political ends, including the threat or actual use of force, in a dialectic of wills" in a military conflict, in which both adversaries interact.

Strategy is important because the resources available to achieve goals are usually limited. Strategy generally involves setting goals and priorities, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). Strategy can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competes. It involves activities such as strategic planning and strategic thinking.

Henry Mintzberg from McGill University defined strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning, while Henrik von Scheel defines the essence of strategy as the activities to deliver a unique mix of value – choosing to perform activities differently or to perform different activities than rivals. while Max McKeown (2011) argues that "strategy is about shaping the future" and is the human attempt to get to "desirable ends with available means". Vladimir Kvint defines strategy as "a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully."

Military theory

Subordinating the political point of view to the military would be absurd, for it is policy that has created war...Policy is the guiding intelligence, and war only the instrument, not vice-versa.

— On War by Carl von Clausewitz

In military theory, strategy is "the utilization during both peace and war, of all of the nation's forces, through large scale, long-range planning and development, to ensure security and victory" (Random House Dictionary).

The father of Western modern strategic study, Carl von Clausewitz, defined military strategy as "the employment of battles to gain the end of war." B. H. Liddell Hart's definition put less emphasis on battles, defining strategy as "the art of distributing and applying military means to fulfill the ends of policy". Hence, both gave the pre-eminence to political aims over military goals. U.S. Naval War College instructor Andrew Wilson defined strategy as the "process by which political purpose is translated into military action." Lawrence Freedman defined strategy as the "art of creating power."

Eastern military philosophy dates back much further, with examples such as The Art of War by Sun Tzu dated around 500 B.C.

Counterterrorism Strategy

Because counterterrorism involves the synchronized efforts of numerous competing bureaucratic entities, national governments frequently create overarching counterterrorism strategies at the national level. A national counterterrorism strategy is a government's plan to use the instruments of national power to neutralize terrorists, their organizations, and their networks in order to render them incapable of using violence to instill fear and to coerce the government or its citizens to react in accordance with the terrorists' goals. The United States has had several such strategies in the past, including the United States National Strategy for Counterterrorism (2018); the Obama-era National Strategy for Counterterrorism (2011); and the National Strategy for Combatting Terrorism (2003). There have also been a number of ancillary or supporting plans, such as the 2014 Strategy to Counter the Islamic State of Iraq and the Levant, and the 2016 Strategic Implementation Plan for Empowering Local Partners to Prevent Violent Extremism in the United States. Similarly, the United Kingdom's counterterrorism strategy, CONTEST, seeks "to reduce the risk to the UK and its citizens and interests overseas from terrorism so that people can go about their lives freely and with confidence."

Management theory

The essence of formulating competitive strategy is relating a company to its environment.

— Michael Porter

Modern business strategy emerged as a field of study and practice in the 1960s; prior to that time, the words "strategy" and "competition" rarely appeared in the most prominent management literature. Alfred Chandler wrote in 1962 that: "Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals." Michael Porter defined strategy in 1980 as the "...broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals" and the "...combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there."

Definition

Henry Mintzberg described five definitions of strategy in 1998:

• Strategy as plan – a directed course of action to achieve an intended set of goals; similar to the strategic planning concept;
• Strategy as pattern – a consistent pattern of past behavior, with a strategy realized over time rather than planned or intended. Where the realized pattern was different from the intent, he referred to the strategy as emergent;
• Strategy as position – locating brands, products, or companies within the market, based on the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm;
• Strategy as ploy – a specific maneuver intended to outwit a competitor; and
• Strategy as perspective – executing strategy based on a "theory of the business" or natural extension of the mindset or ideological perspective of the organization.

Complexity theorists define strategy as the unfolding of the internal and external aspects of the organization that results in actions in a socio-economic context.

Strategic Problem

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Crouch in 1998 defined the strategic problem as maintaining of flexible relationships that range from intense competition to harmonious cooperation among different players in a changing market. Despite being open to the idea of cooperation between players, this approach still considers that strategy is determined by market and organizational structure, a view consistent with the definition of strategy by Porter and Mintzberg.

In contrast, Burnett regards strategy as a plan formulated through methodology in which strategic problem encompasses six tasks: goal formulation, environmental analysis, strategy formulation, strategy evaluation, strategy implementation, and strategy control.

The literature identifies two main sources for defining a strategic problem. The first is related to environmental factors, and the second focuses on the organizational context (Mukherji and Hurtado, 2001). These two sources summarize three dimensions originally proposed by Ansoff and Hayes (1981). According to them, a strategic problem arises from analysis of internal and external issues, the processes to solve them, and the variables involved.

In Terra and Passador's conceptualization, organizations and their surrounding systems are closely linked, so their survival depends on each other. Therefore, a strategy should combine proactive and reactive approaches, which means recognizing the organization’s impact on the environment and acting to minimize harm while adapting to new demands. The strategy should also align internal and external aspects of the organization and include all related entities. This helps build a complex socio-economic system where the organization is part of a sustainable ecosystem.

Complexity Theory

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Complexity science, as articulated by R. D. Stacey, represents a conceptual framework capable of harmonizing emergent and deliberate strategies. Within complexity approaches, the term "strategy" is intricately linked to action but contrasts programmed action. Complexity theorists view programs merely as predetermined sequences effective in highly ordered and less chaotic environments. Conversely, strategy emerges from a simultaneous examination of determined conditions (order) and uncertainties (disorder) that drive action. Complexity theory posits that strategy involves execution, encompasses control and emergence, scrutinizes both internal and external organizational aspects, and can take the form of maneuvers or any other act or process.

The works of Stacey stand as pioneering efforts in applying complexity principles to the field of strategy. This author applied self-organization and chaos principles to describe strategy, organizational change dynamics, and learning. Their propositions advocate for strategy approached through choices and the evolutionary process of competitive selection. In this context, corrections of anomalies occur through actions involving negative feedback, while innovation and continuous change stem from actions guided by positive feedback.

Dynamically, complexity in strategic management can be elucidated through the model of "Symbiotic Dynamics" by Terra and Passador. This model conceives the social organization of production as an interplay between two distinct systems existing in a symbiotic relationship while interconnected with the external environment. The organization's social network acts as a self-referential entity controlling the organization's life, while its technical structure resembles a purposeful "machine" supplying the social system by processing resources. These intertwined structures exchange disturbances and residues while interacting with the external world through their openness. Essentially, as the organization produces itself, it also hetero-produces, surviving through energy and resource flows across its subsystems.

This dynamic has strategic implications, governing organizational dynamics through a set of attraction basins establishing operational and regenerative capabilities. Hence, one of the primary roles of strategists is to identify "human attractors" and assess their impacts on organizational dynamics. According to the theory of Symbiotic Dynamics, both leaders and the technical system can act as attractors, directly influencing organizational dynamics and responses to external disruptions. Terra and Passador further assert that while producing, organizations contribute to environmental entropy, potentially leading to abrupt ruptures and collapses within their subsystems, even within the organizations themselves. Given this issue, the authors conclude that organizations intervening to maintain the environment's stability within suitable parameters for survival tend to exhibit greater longevity.

The theory of Symbiotic Dynamics posits that organizations must acknowledge their impact on the external environment (markets, society, and the environment) and act systematically to reduce their degradation while adapting to the demands arising from these interactions. To achieve this, organizations need to incorporate all interconnected systems into their decision-making processes, enabling the envisioning of complex socio-economic systems where they integrate in a stable and sustainable manner. This blend of proactivity and reactivity is fundamental to ensure the survival of the organization itself.

Components

Professor Richard P. Rumelt described strategy as a type of problem solving in 2011. He wrote that good strategy has an underlying structure he called a kernel. The kernel has three parts: 1) A diagnosis that defines or explains the nature of the challenge; 2) A guiding policy for dealing with the challenge; and 3) Coherent actions designed to carry out the guiding policy. President Kennedy illustrated these three elements of strategy in his Cuban Missile Crisis Address to the Nation of 22 October 1962:

1. Diagnosis: "This Government, as promised, has maintained the closest surveillance of the Soviet military buildup on the island of Cuba. Within the past week, unmistakable evidence has established the fact that a series of offensive missile sites are now in preparation on that imprisoned island. The purpose of these bases can be none other than to provide a nuclear strike capability against the Western Hemisphere."
2. Guiding Policy: "Our unswerving objective, therefore, must be to prevent the use of these missiles against this or any other country, and to secure their withdrawal or elimination from the Western Hemisphere."
3. Action Plans: First among seven numbered steps was the following: "To halt this offensive buildup a strict quarantine on all offensive military equipment under shipment to Cuba is being initiated. All ships of any kind bound for Cuba from whatever nation or port will, if found to contain cargoes of offensive weapons, be turned back."

Rumelt wrote in 2011 that three important aspects of strategy include "premeditation, the anticipation of others' behavior, and the purposeful design of coordinated actions." He described strategy as solving a design problem, with trade-offs among various elements that must be arranged, adjusted and coordinated, rather than a plan or choice.

Formulation and implementation

Strategy typically involves two major processes: formulation and implementation. Formulation involves analyzing the environment or situation, making a diagnosis, and developing guiding policies. It includes such activities as strategic planning and strategic thinking. Implementation refers to the action plans taken to achieve the goals established by the guiding policy.

Bruce Henderson wrote in 1981 that: "Strategy depends upon the ability to foresee future consequences of present initiatives." He wrote that the basic requirements for strategy development include, among other factors: 1) extensive knowledge about the environment, market and competitors; 2) ability to examine this knowledge as an interactive dynamic system; and 3) the imagination and logic to choose between specific alternatives. Henderson wrote that strategy was valuable because of: "finite resources, uncertainty about an adversary's capability and intentions; the irreversible commitment of resources; necessity of coordinating action over time and distance; uncertainty about control of the initiative; and the nature of adversaries' mutual perceptions of each other."

Game theory

In game theory, a player's strategy is any of the options that the player would choose in a specific setting. Any optimal outcomes they receive depend not only on their actions but also, the actions of other players.

See also

• Concept Driven Strategy
• Consultant
• Odds algorithm (Odds strategy)
• Sports strategy
• Strategy game
• Strategic management
• Strategy pattern
• Strategic planning
• Strategic voting
• Strategist
• Strategy Markup Language
• Tactic (method)
• Time management
• U.S. Army Strategist

Further reading

• Burgelman, James. Strategy is Destiny (2002): Strategy Is Destiny: How Strategy-Making Shapes a Company's Future
• Freedman, Lawrence. Strategy: A History (2013): Strategy: A History 1st Edition
• Heuser, Beatrice. The Evolution of Strategy (2010): The Evolution of Strategy: Thinking War from Antiquity to the Present
• Kvint, Vladimir. Strategy for the Global Market: Theory and Practical Applications (2016): Excerpt from Google Books

References

1. στρατηγία, Henry George Liddell, Robert Scott, A Greek-English Lexicon, on Perseus
2. Wragg, David W. (1973). A Dictionary of Aviation (first ed.). Osprey. p. 251. ISBN 9780850451634.
3. Heuser, Beatrice (14 October 2010). The evolution of strategy : thinking war from antiquity to the present (Illustrated ed.). Cambridge, UK: Cambridge University Press. pp. 27–28. ISBN 978-0-52-115524-3.
4. ^ Freedman, Lawrence (2013). Strategy. Oxford University Press. ISBN 978-0-19-932515-3.
5. Simeone, Luca (3 July 2020). "Characterizing Strategic Design Processes in Relation to Definitions of Strategy from Military, Business and Management Studies" (PDF). The Design Journal. 23 (4): 515–534. doi:10.1080/14606925.2020.1758472. S2CID 218922359.
6. ^ Mintzberg, Henry and, Quinn, James Brian (1996). The Strategy Process: Concepts, Contexts, Cases. Prentice Hall. ISBN 978-0-132-340304.{{cite book}}: CS1 maint: multiple names: authors list (link)
7. ^ Henry Mintzberg (May 1978). "Patterns in Strategy Formation" (PDF). Management Science. 24 (9): 934–48. doi:10.1287/mnsc.24.9.934. S2CID 154086210. Archived from the original (PDF) on 19 October 2013. Retrieved 31 August 2012.
8. Henrik von Scheel and Prof Mark von Rosing. Importance of a Business Model (pp. 23–54). Applying real-world BPM in an SAP environment. ISBN 978-1-59229-877-8
9. Kvint, Vladimir (2009). The Global Emerging Market: Strategic Management and Economics. Routeledge. ISBN 9780203882917. the global emerging market.
10. Liddell Hart, B. H. Strategy London: Faber, 1967 (2nd rev ed.) p. 321
11. Wilson, Andrew (2012). Masters of War: History's Greatest Strategic Thinkers. The Teaching Company.
12. Freedman, Lawrence. (2 September 2013). Strategy : a history. Oxford. ISBN 9780199349906. OCLC 858282187.{{cite book}}: CS1 maint: location missing publisher (link)
13. Giles, Lionel The Art of War by Sun Tzu. Special Edition Books. 2007.
14. ^ Stigall, Dan E.; Miller, Chris; Donnatucci, Lauren (7 October 2019). "The 2018 U.S. National Strategy for Counterterrorism: A Synoptic Overview". American University National Security Law Brief. Washington DC. SSRN 3466967.
15. "2018 U.S. National Strategy for Counterterrorism" (PDF). whitehouse.gov. October 2018 – via National Archives.
16. "Counter-terrorism strategy (CONTEST) 2018". GOV.UK. 20 August 2018. Retrieved 20 October 2019.
17. ^ Porter, Michael E. (1980). Competitive Strategy. Free Press. ISBN 978-0-684-84148-9.
18. Kiechel, Walter (2010). The Lords of Strategy. Harvard Business Press. ISBN 978-1-59139-782-3.
19. Ghemawat, Pankaj (Spring 2002). "Competition and Business Strategy in Historical Perspective". Business History Review. 76 (1): 37–74. doi:10.2307/4127751. JSTOR 4127751. SSRN 264528.
20. Chandler, Alfred Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York, 1962.
21. Mintzberg, H. Ahlstrand, B. and Lampel, J. Strategy Safari : A Guided Tour Through the Wilds of Strategic Management, The Free Press, New York, 1998.
22. Stacey, R. D. (1995). "The science of complexity – an alter-native perspective for strategic change processes". Strategic Management Journal. 16 (6): 477–95. doi:10.1002/smj.4250160606. S2CID 16794111.
23. ^ Terra, L. A. A.; Passador, J. L. (2016). "Symbiotic Dynamic: The Strategic Problem from the Perspective of Complexity". Systems Research and Behavioral Science. 33 (2): 235–248. doi:10.1002/sres.2379.
24. Morin, E. (2005). Introduction à la pensée complexe. Paris: Éditionsdu Seuil.
25. Crouch, A. (1998). "Reframing the strategic problem: An accommodation of harmony and belligerence in strategic management". Journal of Business Research. 41 (1): 3–13. doi:10.1016/S0148-2963(97)00007-6.
26. Porter, M. E. A. A. (1996). "What is strategy?". Harvard Business Review. 74 (6): 61–78.
27. Mintzberg, H. (1987). "Crafting Strategy". Harvard Business Review: 66–75.
28. Burnett, J.J. (1998). "A strategic approach to managing crises". Public Relations Review. 24 (4): 475–488. doi:10.1016/S0363-8111(99)80112-X.
29. Mukherji, A.; Hurtado, P. (2001). "Interpreting, categorizing and responding to the environment: the role of culture in strategic problem definition". Management Decision. 39 (2): 105–112. doi:10.1108/EUM0000000005416.
30. ^ Stacey, R. D. (1995). "The science of complexity: An alternative perspective for strategic change processes". Strategic Management Journal. 16 (6): 477–495. doi:10.1002/smj.4250160606.
31. Morin, E. (2005). Introduction à la pensée complexe. Paris: Éditionsdu Seuil.
32. Stecey, R. D. (1996). "Emerging strategies for a chaotic environment". Long Range Planning. 29 (2): 182–189. doi:10.1016/0024-6301(96)00006-4.
33. Stacey, R. D. (2005). The chaos frontier: creative strategic control for business. Malksham: Redwood Press.
34. ^ Terra, L. A. A.; Passador, J. L. (2019). "The nature of social organization of production: From firms to complex dynamics". Systems Research and Behavioral Science. 36 (4): 514–531. doi:10.1002/sres.2567. S2CID 149946425.
35. ^ Rumelt, Richard P. (2011). Good Strategy/Bad Strategy. Crown Business. ISBN 978-0-307-88623-1.
36. "American Rhetoric: John F. Kennedy – Cuban Missile Crisis Address to the Nation".
37. Henderson, Bruce (1 January 1981). "The Concept of Strategy". Boston Consulting Group. Retrieved 18 April 2014.
38. Ben Polak Game Theory: Lecture 1 Transcript ECON 159, 5 September 2007, Open Yale Courses.

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