The strategy is that the long-term direction of an organisation. This has two advantages. First, the long-term direction of an organisation can include both deliberate, logical strategy and more incremental, emergent patterns of strategy. Second, the long-term direction can include both strategies that emphasize difference and competition, and methods that recognize the roles of cooperation and even imitation.
“The determination of the long-run goals and objectives of an enterprise and the adoption of the course of action and the allocation of the resources necessary for carrying out these goals” – Alfred D. Chandler
‘Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value” – Michael Porter
‘a firm’s theory about how to gain competitive advantage’ – Peter Druker
‘a pattern in a stream of decision’ – Henry Mitzberg
‘the long-term direction of an organization’ – Exploring Strategy
The three-element that comes from different strategy definition can explain further
The long term, direction, and organization.
- The long term:The long-run Strategies are typically measured over years, for a few organisations a decade or more. The importance of a long-term perspective on strategy is emphasized by the ‘three horizons’ framework.
The three-horizons framework suggests organisations should consider themselves as comprising three varieties of business or activity, defined by their ‘horizons’ in terms of years.
Horizon 1 businesses are basically this core activities. Horizon 1 businesses need defending and increasing, but the expectation is that within the future they’re going to likely be flat or declining in terms of profits (or whatever else the organisation values).
Horizon 2 businesses are emerging activities that ought to provide new sources of profit.
Finally, there are Horizon 3 possibilities, that nothing is certain. These are typically risky research and development (R&D) projects, start-up ventures, test-market pilots, or similar: at Tesla, these can be further solar electric initiatives, rockets, and space transportation.
Strategy involves pushing out Horizon 1 as far as possible, at the identical time as looking to Horizons 2 and 3.
- Strategic direction:
Over the years, strategies follow some reasonably long-term direction or trajectory. Sometimes a strategic direction only emerges as a coherent pattern over time. Typically, however, managers and entrepreneurs try and set the direction of their strategy in step with long-term objectives. In private-sector businesses, the target guiding strategic direction is typically maximizing profits for shareholders.
However, profits don’t always set strategic direction. First, public-sector and charity organisations may set their strategic direction in keeping with other objectives
The objectives behind strategic direction always need close scrutiny.
Organisations involve many relationships, both internally and externally. this is often because organisations typically have many internal and external stakeholders, in other words, people and groups that rely on the organisation and upon which the organisation itself depends. Internally, organisations are full of people, typically with diverse, competing, and more or less reasonable views of what should be done.
In strategy, therefore, it’s always important to seem inside organisations and to contemplate the people involved and their different interests and views. Externally, organisations are surrounded by important relationships, for instance with suppliers, customers, alliance partners, regulators, and investors. For Tesla, relationships with investors and advertisers are crucial. Strategy, therefore, is additionallyvitally concerned with an organisation’s external boundaries: in other words, questions about what to incorporate within the organisation and the way to manage important relationships with what’s kept outside.
Because strategy typically involves managing people, relationships, and resources, the subject is sometimes called ‘strategic management’.