Strategy is the process of planning a course of action to achieve goals. It helps to define the long-term direction of a business, the type of organization that is intended to be and how it will contribute to its customers and society at large.
It is a vital element of the management process that helps an institution develop logical decisions and achieve its goals as quickly as possible in order to keep up with changing technology, market and business conditions. It can also help an institution make the best use of its resources, minimize costs and improve the overall performance of its business.
The strategic framework is the central driving document that outlines the strategic objectives of an institution and guides its decision-making processes. It consists of high-level objectives and lower-level strategies that are designed to ensure that these objectives are met.
These higher-level objectives are derived from the firm’s mission and core values, as well as the specific offering, target market and customer segments. These can then be used to formulate the company’s generic business strategy, which focuses on growth and financial stability in a competitive environment.
However, it is not always easy to predict future events and circumstances that might have an impact on the implementation of a planned strategy. That is why it is essential to have a sound strategic framework, in which strategies are based on the analysis of the business environment and the potential risks and opportunities associated with it.
This can be achieved through the application of a SWOT analysis, which provides the business with the framework to assess its strengths, weaknesses, opportunities and threats in the context of a given situation. It can also help a business develop a strategy that will enable it to capitalize on potential threats and avoid pitfalls.
Developing a strategy is the first step to achieving your vision and long-term goals. It should be focused on defining and articulating a distinctive competence that distinguishes the company from its competitors and gives it the edge to compete effectively.
It should also include a definition of how to generate demand for its products or services, increase sales, utilize new technologies and create higher margins. It should also set forth the methods by which the company will pursue these goals, including key policies and operational processes that will support the execution of those strategies.
A strategy should be reviewed periodically to make sure that it is still relevant to the company and its goals. It should be evaluated to determine whether or not it is a good use of the company’s time and resources, and to assess whether its outcomes are meeting the company’s expectations.
Tactics are the smaller, more focused plans that are part of a larger strategy. They are generally less impactful than a strategic plan, but they can play an important role in the success of the entire strategy if they are implemented correctly and consistently.
The terms strategy and tactics originated as military terminology, but have since been adapted to fit a variety of situations, from business to sports. Defining the difference between these two terms is critical to understanding how to maximize the effectiveness of an organization’s strategy.