Strategy

by Doreen Yarnold

Background and potted history

The concept of strategy is centuries old and its application was first seen within military contexts. Indeed the words strategy is derived from the Greek word for general. Some of the earliest classic texts on the subject of strategy date back as far as the 3rd century BC. Historic campaigns were deemed to be won or lost in direct relation to the strength or weakness of the strategy used by the generals in command; good tactics can win a battle, but only good strategy can win the campaign!

Superior strategies meant identifying

  • Your own and your opponent’s strengths and weaknesses
  • The calibre and competence of your people
  • The resources you have at your disposal
  • Your financial underpinning
  • Clear goals, objectives, options and end game positions
  • An overall approach to achieving the goals.

All these concepts were originally drawn from the military concept of strategy.

 

The US military generally defines three levels of war:

  1. The strategic, which includes both the National level and the Combat Command (theatre) level
  2. The operational, which extends from the level of a joint task force, including the combined forces of naval and air power with amphibious and ground operation to the manoeuvre brigade echelon
  3. The tactical, which extends from the manoeuvre brigade to the lowest fighting elements, including individual soldiers.

In the modern world, strategy as it relates to business has largely been shaped around a core framework first outlined in the classic book, The Concept of Corporate Strategy, by Kenneth R Andrews (Richard D Irwin, 1971). This focused on what companies can do versus what they might do.

Further work by Michael Porter contained in his important breakthrough book, Competitive Strategy: Techniques for analysing Industries and Competitors (Free Press, 1980), concluded that there are five structural forces which determine an industry’s average profit potential, and which directly influence and impact on the corporate strategies at work within most markets.

In the mid-1980s, while still upholding the works of Andrews and Porter, there came a more inward focus, where strategy looked predominantly at the concept of organisational core competencies and capabilities.

Latterly, an approach which has been called ‘Resource-based view’ (RBV) and which pulls these various approaches together has prevailed. This offers a more comprehensive and rational concept, but also builds on and embraces the two previous approaches.

Current thinking and research suggests that many managers are still in a quiet state of confusion with regard to strategy. The pendulum swing of approaches since the 1970s has done nothing to alleviate this.