Significance of strategy

Significance of strategy
See also
Knowledge gap strategy Strategic management model Balanced scorecard Strategy Strategic position Strategic goal Structure follows strategy Strategic intent Goal intensity matrix

Significance of strategy stems from the fact, that managers try to prepare and plan organization's activities over a longer period of time. It includes reactions to any changes which may occur both in the external environment and inside of the organization. It concerns actions crucial for competitive advantage. Any company operating in the market, regardless of its size, type of business, the competitive position should develop proper strategy.

By using well-developed strategy a company can not only gain a competitive advantage, but also it can become the market leader.

The strategy is basis of the company's success. It should be developed, implemented and continuously improved, to be adequate to the changing environment. Effective strategy creates unique companies, allowing both its employees and stakeholders to set a clear distinction between company and its competitors.

Fig.1. Significance of strategy

Determinants of effective strategy

• effective strategy uses mainly positive attribute which are understandable to customers,
• significant strategy gives a sense of otherness, not only to customers but also employees,
• strategy is present in every action the company everyday,
• It is consciously implemented and executed by each employee,

An effective strategy gives uniqueness in two ways:

• company is perceived differently than other companies in the industry,
• employees have a sense of uniqueness.

The strategy is generally regarded as main method of achieving the desired objectives. Poorly formulated strategy can be an obstacle in implementing and achieving the goals of the company.

References

• Bateman T.S., Snell S.A., (2004), Management: the new competitive landscape -6th ed., McGraw-Hill Irwin, New York.
• Pearce, J. A., Robinson, R. B., & Subramanian, R. (2000). Strategic management: Formulation, implementation, and control. Columbus, OH: Irwin/McGraw-Hill.
• Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
• Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
• Mintzberg, H. (1990). The design school: reconsidering the basic premises of strategic management. Strategic management journal, 11(3), 171-195.
• Porter, M. E. (1981). The contributions of industrial organization to strategic management. Academy of management review, 6(4), 609-620.