Delineating between a strategy and all the other kinds of objectives is sometimes difficult. Why? Because it’s something that is easily confused, but if you work in leadership it’s completely essential to understand the difference.
One way of looking at competitive strategy is to see it as the selection of a desired position within an industry, that is likely to result in competitive advantage. It is a set of choices. Your strategy, then, is to achieve this advantageous position, it’s not the specific actions or tactics describing how you achieve this position. Clouding all of this is the tendency for organizations to use the word strategy for any actions it perceives as being “kind of a big deal”.
A strategy contains the logic of why something will benefit the organization, by repositioning you for greater advantage. If your “strategy” is simply an action plan, it’s likely that you haven’t yet identified how you’re going to generate a competitive advantage. How would you know when you should change tack if the plan is simply to implement the plan?
A few considerations:
• Generating increased operational effectiveness is not a strategy
• Strategy always describes unique activities or approaches
• A strategy is a description for your how you’ll achieve a unique position that drives competitive advantage and profitability
• A strategy is never simply a description of a structural change (our strategy is to merge or downsize)
If your “strategy” leaves questions of why this matters, or what it gets you, you haven’t finished building your strategy yet.
• My strategy is to internationalize (why, and how does this contribute toward the achievement of a unique position?)
• My strategy is to consolidate back-office (operational, however may form an important tactic as part of a strategy)
• My strategy is to increase R & D (why?)
• My strategy is consolidate an industry (structural change that nets you what?)
In your quest to build strategy, it’s often natural to first identify tactics, just don’t stop there. The action you take to achieve an advantage is not a strategy, it’s the position that generates competitive advantage that is the strategy.