A strategy is a long-term activity model that involves moving towards specific goals. Without it, effective work in any field is impossible.
The concept and essence of strategy
It is worth noting that different economists and scientists may have opposing views on such a concept as strategy. So, in the first case, it means a plan drawn up for a long period, the final stage of which is to achieve a specific goal. Researchers of this opinion make assumptions that all processes occurring in the internal and external environment lend themselves to forecasting, management, and control.
Another look at the concept of "strategy" is based on the fact that this is just a long-term direction of activity that determines the position in a competitive environment, the use of resources, production volumes and so on. Thus, it only sets the benchmark for the enterprise, and is not a clear-cut scenario of actions.
The strategy has a long-term nature, and therefore is being developed for several years to come. At the same time, it may concern both the work of the enterprise as a whole and individual projects. The strategy does not have specific postulates, but is formulated in general phrases and expressions.
Distinctive features of the strategy
The concept of "strategy" is inextricably linked with a number of features:
- The development of a strategy does not mean immediate action, but only determines the direction of further work.
- A well-defined plan helps to focus on a specific process, discarding secondary ones.
- The presence of a strategy helps the organization to gradually reach the desired path of development.
- A strategy always has a generalized character or may have several alternative options, since there is always a chance of unforeseen developments.
- In the process of implementing the strategy, facts constantly arise that can adjust the direction of activity, and therefore the final option can be very different from the original.
- It is worth distinguishing the concept of "strategy" from benchmarks, which are a higher form of managerial decision-making.
- One or another element of the strategy at a certain stage can turn into a guideline.
Varieties of strategy
The concept and types of strategies can be described as follows:
- Concentrated growth implies strengthening the position in the current market, as well as finding ways to expand by entering new distribution channels and increasing the assortment.
- Integrated growth implies gaining leadership positions and recognition within a specific market or industry.
- Diversified growth involves a combination of the two strategies described above.
- A reduction strategy may mean curtailing production in order to ensure survival in a crisis period or with subsequent liquidation.
Organization Strategy Concept
The work of any enterprise is not possible without a long-term plan. The concept of organization strategy is a system of promising measures aimed at achieving specific commercial goals. Its development and implementation is influenced by factors such as:
- cash resources of the organization, as well as the possibility of their further acquisition;
- a market situation that describes the competitive environment, as well as the volume of demand;
- internal resources that allow you to increase production volumes or expand the scope of activities;
- interaction with counterparties, as well as state and regulatory bodies;
- analytical abilities of the leader, which allow you to correctly determine the direction of activity
The concept and types of enterprise strategy can be described as follows:
- growth means reaching a higher level than is currently available;
- external development involves the expansion of the organization through the creation of new units;
- internal expansion means an increase in the range of products or the list of services provided;
- limited growth - these are plans for the expansion of production, which are built in accordance with existing internal and external conditions;
- reduction - reduction in the scale of production due to inappropriate;
- cut-off - the allocation of units whose work does not bring the desired effect with their subsequent liquidation;
- a combined strategy can combine the elements of all of the above.
Management strategy
The concept of management strategy is the setting of long-term goals that will determine the activities of the company for a certain period. It consists of the following elements:
- an approximate or detailed plan in accordance with which the activity is carried out;
- a position in the market or industry that the organization plans to take at a certain point in time;
- a list of techniques by which the manager plans to implement his ideas and plans;
- a definite guide to action that all members of the organization must adhere to;
- a description of the prospective condition of the enterprise, which should occur after all the specified conditions are met.
When developing a management strategy for a start, the scope of the enterprise should be clearly defined. Next, the leader should make an idea of what he sees the company in the future. It is also important to understand that an enterprise may deviate from its strategic goal under the influence of internal and external factors. For this, alternative options are being developed.
Behavior strategy
The concept of a behavioral strategy is to develop a person's specific orientation in the surrounding situation and in relation to certain phenomena. Most often, this category is used in relation to conflict management. So, getting into a controversial situation, an individual can apply one of the following strategies:
- competitive position demonstrates a person’s desire to achieve the goal at any cost, preferably to the detriment of the enemy, in order to prove his superiority;
- adaptation is the opposite of opposition, which means that the individual is ready to give up some of his interests in order to avoid aggravation of the situation;
- avoidance involves avoiding the discussion of controversial situations in order to prevent the occurrence of contradictions;
- compromise involves mutual concessions in order to prevent aggravation of the conflict;
- cooperation is a behavior strategy in which both parties are interested in finding a mutually beneficial solution and avoiding confrontation.
Marketing strategy
The concept of marketing strategy implies setting goals for the development and implementation of each individual product in order to increase its sales and popularize among buyers. This program is constantly being adjusted in accordance with the changing market situation. The most commonly used are the following types of marketing strategies:
- market penetration implies an increase in sales in an existing sales area;
- market development is the development of not only new territorial trading floors, but also work to expand the number of consumer categories;
- product development is an attempt to conquer new markets by working with new technologies and names;
- diversification involves the search for new directions in all types of activities.
Strategy Performance Assessment
The concept of "strategy" is inextricably linked with the category of effectiveness. When developing long-term plans, it is important to take into account the desired result in its various aspects. So, a strategy can be evaluated in accordance with the following aspects:
- the economic effect is the size of the net profit received, as well as the volume of attracted investments and their payback period;
- the social effect consists in improving the working and living conditions of workers, the availability of goods for a wide category of the population, and raising the cultural level in society;
- the technical effect is the introduction of the latest technologies, as well as the expansion of the product range;
- ecological effect implies a sense of responsibility towards the environment, which ensures its conservation and reduction of pollution.
Strategy Classification
For the successful operation of the enterprise, a strategy must certainly be developed. The definition of the concept indicates the long-term, as well as the approximation of the established guidelines. It is also worth noting the following classification of strategies:
- By concept:
- minimization of production costs;
- diversification of products and services;
- focus on one activity;
- search for new technologies for the production and provision of services;
- quick response to changes in the internal and external environment;
- Joining forces between departments or organizations.
- By level:
- corporate strategy that is being developed for the organization;
- manager's work plan;
- strategy development for departments and divisions of the enterprise.
- By stage:
- newly created enterprise;
- developing organizations;
- company at the stage of growth;
- decline in popularity.
- According to the characteristics:
- a strategy for a specific product or marketing event;
- global company and industry development plans.
- By strength in the industry:
- market leader strategy;
- response plan for secondary enterprises.
- By the nature of behavior:
- an active attack on competitors, as well as an aggressive marketing policy with the aim of gaining as much market share as possible;
- defensive strategy involves responding to the actions of stronger competitors in order to maintain the existing situation and ensure survival.
Strategy and Tactics
The concept of strategy, tactics are not only interconnected, but also interdependent. The difference between them is scale. So, if a strategy is developed for a long time, then tactics are the current steps that are being taken to achieve a specific goal.
Tactics has a fairly narrow focus. This is a specific event, which is a step towards the implementation of a global strategy. It is needed to solve specific and clear tasks. Thus, we can say that the strategy consists of many tactical steps.
This category, among other things, is also clear and detailed. It is also worth noting the short duration of tactics. But this is relatively relative. So, if you make a strategic plan for the year, the monthly schedule will be called tactics. But if you detail the activities by week, then the previous program will take a more global position, and so on.
Perhaps the main difference between tactics and strategy is concreteness and clarity of action. So, if the second is just a guideline, then the first is direct work, clearly defined by stages and performers.
Strategy Stages
The concept of "organization development strategy" implies not only its development, but also its consistent implementation, which consists of the following steps:
- the study of the goals, as well as linking them with the state of the internal and external environment (it is also important to convey the meaning and idea to each of the employees in order to be able to start a full-fledged work);
- Further, it is necessary to consider the situation with resources that has developed at the enterprise (issues are being solved not only of their accounting, but also of competent distribution, and, if necessary, of immediate replenishment);
- Having studied the strategic plan, senior management must decide to maintain the current organizational structure of the enterprise or its correction or change;
- any changes in the work of the enterprise will certainly lead to the emergence of resistance from the staff, and therefore, having foreseen this opportunity, the manager should develop a program of actions to overcome it;
- during the implementation of the strategy, problems may arise related to internal and external fluctuations, as well as inaccuracy of the initial plan (it is necessary to timely respond and make changes to the program of work).
findings
The concept of enterprise strategy involves the preparation of a long-term plan, which serves as a guide for future activities. It is worth noting that not all economists and scientists have a common opinion on this issue. So, some consider strategy an approximate direction of work. Some researchers agree that this is a clear plan to achieve a specific state of the organization after a certain period of time.
It is important to understand that the term "strategy" is used in different areas of social and economic life. The basic concepts are connected specifically with the activities of enterprises. In this context, availability plays an important role, as well as a resource allocation mechanism. It is also worthwhile to carefully study the market situation in order to predict possible fluctuations in the future. Also, the adjustment of external and internal relations, which may affect the process of implementing strategic programs, plays an important role.
If we talk about an industrial enterprise, then the strategy may involve growth in order to increase production and increase net profit. Ambitions may also arise regarding external development, which is associated with the opening of new divisions and representative offices. As for internal processes, the strategy can be aimed at expanding the range of products or introducing new economical technologies. In this case, it is always worth considering external and internal limiters, as well as unforeseen situations. In some cases, when the company operates at a loss, it is possible to curtail production or cut off an inefficient unit. The company manager can use these strategies individually or in combination.
