From CEOpedia | Management online

Strategy is a program of general activities aimed at exploiting the production potential and resources to achieve the stated objectives.


  • general program for the definition and implementation of the main activities of organization,
  • time based plan of responses to environment,
  • specifies the role of the organization in society,
  • defines the mission of the organization (a specific reason for its existence, distinguishing it from others)
  • formulate the tasks that managers and employees must perform in order to achieve the objectives.

Features of strategy

  • the time horizon - remote from the point of view of the implementation of actions and their effects,
  • focusing efforts on most important task (however it can limit resources available for other activities)
  • structure of decisions - managers take many decisions of the specified type at the time, they need to be consistent,
  • ubiquity - the strategy includes a wide range of company activities,
  • is subject to evaluation by various indicators,
  • includes the analysis of resources of competition.

Types of strategy

Due to direction of changes

  • development - company expands by investment, market share, diversification of production,
  • stabilizing - stable company position, stalling, waiting for a more favorable moment,
  • recovery - on the one hand, involves reorganization (resolving identified action errors), on the other hand, it is focused on the creation of mechanisms to protect the company against potential external and internal disturbances,
  • defensive - orientated toward survival,
  • combined - combination of above.

Due to market and product

Due to relationships between companies

  • competition (combat, agreement, avoiding, ignoring)
  • cooperation.

Strategy as a way of action in the face of problems

A different approach to the understanding of the strategy, are the definitions relating to the behavior of the organization in the face of problems.

On the one hand, the strategy is defined as a string of decisions defining the behavior of the organization within a range of time, on the other hand, strategy is a set of ideas and the structure through which the company recognizes, interprets and solves certain problems and in accordance with which managers choose certain actions.

See also:

Examples of Strategy

  1. Corporate Strategy: A corporate strategy is a plan that is developed by a business in order to define its purpose, identify its goals and objectives, and guide its operations. It is used to establish the methods and tactics a company will use to reach its desired outcomes.
  2. Strategic Planning: Strategic planning is the process of assessing an organization's current position and developing a plan for how it can reach its desired objectives. The process involves the evaluation of an organization's internal strengths and weaknesses and its external opportunities and threats. It also involves the establishment of goals and objectives, the development of strategies to achieve them, and the implementation of those strategies.
  3. Market Penetration Strategy: A market penetration strategy is a method of increasing a company's market share by expanding its existing customer base. This type of strategy focuses on gaining a larger share of the existing market, rather than expanding into new markets. It is often used as a way to increase revenues and profitability.
  4. Cost Leadership Strategy: A cost leadership strategy is a business strategy that involves providing a product or service at the lowest possible price to gain a competitive advantage. This type of strategy is often used by companies that have the ability to produce products or services at a lower cost than their competitors.
  5. Differentiation Strategy: A differentiation strategy is a business strategy that seeks to make a product or service stand out from its competitors. This strategy involves creating a product or service that is unique and offers something that competitors cannot. It is often used to gain a competitive advantage by creating a product that is seen as more desirable than similar products offered by competitors.

Advantages of Strategy

Strategy can be an effective tool for businesses to reach their goals and objectives. Some of the advantages of implementing a strategic plan include:

  • Defining clear objectives: A strategic plan helps to provide clarity and focus by outlining the objectives, goals and outcomes of the organization. This can help to ensure that everyone is on the same page and working towards the same goals.
  • Organizational alignment: A strategic plan helps to ensure that everyone in the organization is working towards a common goal and that all activities are properly aligned with the overarching strategy.
  • Resource optimization: A strategic plan can help to ensure that the organization's resources are being used in the most efficient and effective manner possible. This can help to increase efficiency and reduce costs in the long run.
  • Competitive advantage: A strategic plan can help to give the organization an edge over its competitors by providing a clear roadmap for success. This can help the organization to stay ahead of the competition and increase its market share.
  • Improved decision making: A strategic plan can help to provide a framework for making decisions, which can help to ensure that decisions are made quickly and effectively. This can help the organization to be more agile and responsive to changing market conditions.

Limitations of Strategy

One of the main limitations of strategy includes:

  • Limited resources: Strategies often require substantial resources in order to be implemented, and these resources may not be available due to financial constraints or other factors.
  • Time: Strategies can take a long time to implement, and if the environment changes or the goals of the strategy shift, it may no longer be viable.
  • Poor communication: If communication between stakeholders is poor, it can lead to confusion over what the strategy is actually aiming to achieve.
  • Lack of coordination: Strategies require coordination between different teams, departments, and people in order to be successful. Without it, the strategy may not be implemented properly.
  • Lack of commitment: Without commitment from those involved, a strategy can quickly become ineffective.
  • Poor evaluation: Evaluating a strategy is essential to ensure that it is still relevant and effective. Without proper evaluation, the strategy may become outdated or inefficient.

Other approaches related to Strategy

An effective strategy requires a strong understanding of the different approaches that can be taken in order to achieve the desired objectives. These approaches include:

  • Goal Setting: Setting clear and achievable goals that are aligned with the overall mission and objectives of the organization. This helps to ensure that all activities are focused on achieving these objectives.
  • Strategy Formulation: Developing a strategy to reach the set goals. This includes analyzing the environment, understanding the organization’s strengths and weaknesses, and determining the best course of action to reach the objectives.
  • Resource Allocation: Allocating the necessary resources to execute the strategy. This may involve assigning people, budgeting, and other resources to ensure that the strategy is properly implemented.
  • Implementation: Putting the strategy into action. This includes developing a plan of action and ensuring that all stakeholders are aware of their roles and responsibilities for the strategy.
  • Measurement and Evaluation: Regularly measuring and evaluating the progress of the strategy. This helps to identify areas for improvement and ensure that the strategy is achieving its desired objectives.

In summary, a successful strategy requires a clear understanding of the different approaches that can be taken to reach the desired goals. This includes goal setting, strategy formulation, resource allocation, implementation, and measurement and evaluation.

Strategyrecommended articles
Beam of objectives theoryStrategy of the organizationStrategic goalGoal intensity matrixStrategic managementStrategic planningSignificance of strategyImportance of strategic managementBenefits of strategic management


Author: Krzysztof Wozniak