Strategy versus Policy by V S RAMA RAO on NOVEMBER 3, 2010 Strategies define the overall character, mission and direction

of an enterprise. The focus on an organizations long term relationship with its external environment specifies what an organization will be doing in future, reflecting the kind of enterprise the managers envision. Strategies are formulated and implemented with a view to achieve specific goals. An appropriate strategy will give managers an advantage over their opponents or competitors it will enable tem to marshal their resources so that they will be more effectively utilized. In other words, the basic purposes of a strategy are to deploy human as well as physical resources in order to maximize the chances of achieving a selected objective in the face of difficulties. It is an important offensive device in the hands of aspiring Davids to combat corporate Goliaths. A policy, on the other hand tells people what they should and should not do in order to contribute to the achievement of corporate goals. It says something about how goals will be attained. It is a helpful guide that makes the strategy of the business explicit and provides direction to subordinates. Strategy versus Policy Strategy 1) Deals with strategic decisions that decide the long term health of an enterprise. It is a comprehensive plan of action designed to meet certain specific goals. 2) It is a means of putting a policy into effect within certain time limits. 3) Deals with those decisions which have not been encountered before in quite the same form, for which no predetermined and explicit set or ordered responses exist in the organization and which are important in terms of the resources committed or the precedent set 4) Deals with crucial decisions whose implementation requires constant attention of top management. Policy 1) It offers guidelines for managers to take appropriate decisions. 2) It is a general course of action with no defined time limits. 3) It is guide to action in areas of repetitive activity.

4) Once policy decisions are formulated these can be delegated and implemented by others independently. Strategic management Evolution Till 1930s most firms were happy focusing attention on their day to day short term activities. In an environment characterized by very little competition, a functional orientations supported by budgeting ad control systems guided the fortunes of firms. The adhoc policy making yielded ground to planned policy formulations and by 1940 the emphasis shifted to the integrations of functional areas in the context of environmental demands. The period between 1960s and 1980s was characterized by rapid environmental changes and increased complexity of business functions necessitating long range planning and comprehensive business policies aimed at placing a firm in an advantageous relationship to its environment. During the 1980s and early 1990s interest in the role of strategy in building competitive advantage resulted in a shift of interest toward the internal aspects of the firm (Hofer et al) Strategic management is currently the core of business policy discipline everywhere .Grant has summarized these developments thus: Strategic management is the process by which organizations try to determine what needs to be done to achieve corporate objectives and more importantly how these objectives are to be mer. Ideally it is a process by which senior management examines the organization and the environment in which it operates and attempts to establish an appropriate and optimal fit between the to ensure the organizations success. Strategic planning is usually done over three to five years time horizons by senior management or when some important event impacts the organizations such as a merger or acquisition or its environment. Definitions of Strategic 1) It is continuous process of effectively relating the organizations objectives and resources to the opportunities in the environment 2) It is a process of formulating implementing and evaluating cross functional of decisions that enable an organizations to achieve its objectives 3) It is a stream of decisions and actions which lead to the development of an effective strategy or strategies to a help achieve corporate objectives. 4) It is the set of decisions and actions resulting in formulation and implementing of strategies designed to achieve the objectives of an organization.

Strategy vs. Tactics Military minds often think in terms of strategy and tactics. Strategy is immutable; it is a Big Picture look at a problem that focuses upon the entire forest and not individual trees. Military concepts such as objective, offensive, simplicity, unity of command, mass, economy of force, maneuver, surprise, and security represent the timeless principles of strategy. Why do you think Sun Tzus The Art of War has been a best seller for thousands of years and translated into every imaginable language? Because it teaches strategy and the lessons of strategy are timeless. They are bound to our very nature as humans. Tactics vary with circumstances and, especially, technology. If I were to teach you how to be a soldier during the American Revolution, you would learn how to form and maneuver in lines, perform the 27 steps in loading and firing a musket, and how to ride and tend to a horse. Naturally, yesterdays tactics wont win todays wars but yesterdays strategies still win todays wars and will win them tomorrow and into the future. So, tactics present a Small Picture perspective where individual trees are in focus but the Big Picture of the forest is not. Just as your eyes have to look up from this page to refocus on the larger room youre reading it in, so strategy and tactics require a different focus.

WHAT ARE THE FOUR STRATEGIC TYPES? DESCRIPTION In their 1978 book: "Organization Strategy, Structure, and Process" Raymond Miles and Charles Snow argue that different company strategies arise from the way companies decide to address three fundamental problems: Entrepreneurial problem. How a company should manage its market share. Engineering problem. How a company should implement its solution to the entrepreneurial problem. Administrative problem. How a company should structure itself to manage the implementation of the solutions to the first two problems. Based on that, they classify companies into Four Strategic Types: 1. Defender. A mature type of company in a mature industry that seeks to protect its market position through efficient production, strong control mechanisms, continuity, and reliability. o Entrepreneurial problem: how to maintain a stable share of the market? Hence they function best in stable environments, they strive for cost leadership, they specialize in particular areas and they use established and standardized technical processes to maintain low costs. o Administrative problem: how to ensure efficiency? Centralization, Vertical Integration, formal procedures, and discrete functions. o Environment: because their environments change slowly, Defenders can rely on long-term planning. 2. Prospector. A type of company that seeks to exploit new opportunities, to develop new products and/or services, and to create new markets. Typically its core skills lie in marketing and R&D and it will tend to have a broad range of technologies and product types. o Entrepreneurial problem: how to locate and exploit new product and market opportunities? Prospectors have broad product or service lines and often promote creativity over efficiency. They prioritize new product and service development and innovation to meet new and changing customer needs and demands and to create new demands.

Administrative problem: how to coordinate diverse business activities and promote innovation? Decentralization, employing generalists (not specialists), have few levels of management, encourage collaboration among different departments and units. o Environment: Prospectors thrive in changing business environments that have an element of unpredictability, and succeed by constantly examining the market in a search for new opportunities. 3. Analyser. A type of company that avoids excessive risks but excels in the delivery of new products and/or services. Typically it concentrates on a limited range of products and technologies and seeks to outperform other companies on the basis of quality enhancement. o Entrepreneurial problem: how to maintain their shares in existing markets and how to find and exploit new markets and product opportunities? Must maintain the efficiency of established products or services, while remaining flexible enough to pursue new business activities. Seek technical efficiency to maintain low costs, but also emphasize new product and service development to remain competitive when the market changes. o Administrative problem: how to manage both of these aspects? Cultivate collaboration among different departments and units. Analyzer organizations are characterized by balancea balance between defender and prospector organizations. 4. Reactor. A type of company which have little control over their external environment, lacking the ability to adapt to external competition and lacking in effective internal control mechanisms. They do not have a systematic strategy, design, or structure. No single strategic orientation is the best. Miles and Snow argue that what determines the success of a company ultimately is not a particular strategic orientation, but simply establishing and maintaining a systematic strategy that takes into account a company's environment, technology, and structure.

Strategy: Devise new reasons for their current customers to pick up that yellow box at the supermarket and use more baking soda. Specifically, sell Arm & Hammer as a deodorizer for the fridge. Thats a big, strategic idea that led Arm & Hammer in a completely different direction. Theyre now marketing a whole line of environmentally friendly cleaning products. Every current Arm & Hammer product, from toothpaste to cat litter, originated with that strategy of finding new ways to use baking soda. And in the process, an old-fashioned brand has managed to stay relevant. Tactics: TV advertising. Magazine ads. Infomercials. Retail promotions. Website dedicated to all the various uses of Arm & Hammer Baking Soda. All the traditional marketing tactics were employed. All good marketing strategies share some common components: Thorough understanding of the brands status and story. Arm & Hammer has a strong heritage that dates back to the 1860s. That yellow box with the red Arm & Hammer logo is instantly recognizable, and stands for much more than just generic sodium bicarbonate.

 A realistic assessment of the products strengths & weaknesses. Market research proved what Arm & Hammer executives suspected that people dont bake as much as they used to. But it also showed that people use their baking soda for all kinds of things besides baking. So why not leverage that? A clear picture of the competition. Arm & Hammer has always been the undisputed market leader in the category. However, when they decided to introduce toothpaste and laundry detergent, the competition became fierce. Arm & Hammers long-standing leadership position in one vertical market gave them a fighting chance against Procter & Gamble. Intimate knowledge of the consumer and the market. The shift away from the traditional American homemaker directly affected baking soda sales. Church & Dwight kept up with the trends, and even led the charge on environmental issues. A grasp of the big-picture business implications. Good strategies reach way beyond the marketing department. When you have a big idea, execution of the strategy will inevitably involve operations, R&D, HR, finance and every other business discipline. A great strategy does not depend on brilliant tactics for success. If the idea is strong enough, you can get by with mediocre tactical execution. However, even the best tactics cant compensate for a lousy strategy. Some people confuse marketing strategy with goals. They are not synonymous. Here are a few examples from misguided on-line sources:

Strategy versus Tactics

by G AVRI EL SHAW

Strategy is of paramount importance yet apparently difficult for most managers to clearly explain or understand. The common view of strategy, and its counterpoint tactics, is that strategy is about the long-term, whilst tactics are about the short-term.

Inline with that view comes Tregos and Zimmerman who defined strategy as: A framework within which decisions are made which establish the nature and direction of the business. The nature and direction of the business is quite a toplevel and long-term-view definition of strategy. But viewing strategy as either top-down, long-term or regarding the nature and direction of the business is cumbersome and obsolete. Heres why:

My most favored view of strategy and tactics comes from the Theory of Constraints (TOC) which defines: Strategy as the answer to the question what for (objective, purpose) Tactics as the answer to the question how (process, actions) This posits both strategy and tactics as existing together at each and every level of the organization, from top to bottom not just strategy at the top and tactics at the bottom.

What is Strategy? Your strategy is the act of creating decisions that will benefit the future outcome of your business. Strategy is the set of directions you make or your situation and position within the business community. Strategy often also refers to your timing in the marketplace and strategically choosing the most beneficial time to launch your business or your campaign. 1. Strategy is your overall goal in your business. 2. Strategy is your standing within the marketplace. 3. Strategy is your position in your niche. What are Tactics? Tactics should work with your strategy and they are the set of requirements need for your plan to take place. Your tactic is your device used for meeting your goals set by your strategy. Strategy and tactics should always be relative to one another because the tactics are the set of actions needed to fulfill your strategy. 1. Tactics are the tools you use to achieve your goals. 2. Tactics include things like advertising and marketing.

3. Tactics are the steps taken to achieve your goals. Strategy vs. Tactics To be successful in your business, you need to have a plan and a strategy. This strategy will include your goals and objectives for your business. They may be short term and long term. You will need to have a goal for where you want to be with your business in the future. Your tactics are what you will use to ensure that plan happens as it should.

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