Strategy refers to how given objectives and targets will be achieved, concerning itself with the relationship between ends and means, between which are the results the organisation seeks. A company or business will use tactics to conceive and then execute courses of action necessary to attain these certain aims.
A strategy is all about how a company deploys or allocates the resources at its disposal, whereas tactics is how you employ to make use of them. Together, they both connect the gap that exists between ends and means.
There are two other modes of strategy: corporate and competitive.
The corporate strategy defines the businesses and markets in which a company will operate and is decided depending on what a company’s mission is. This will include what the company does, why it exists and what it intends to become!
The competitive strategy defines for a business how it will compete with other enterprises. This form of business strategy completely depends on a company’s capabilities, strengths and weaknesses in relation to market characteristics and of course, its competitor’s capabilities, strengths and weaknesses.
Michael Porter, a Harvard Business School professor, says competition with an industry is driven by five basic factors:
1. The threat of new entrants.
2. The threat of substitute products or services.
3. Bargaining power of suppliers.
4. Bargaining power of buyers.
5. Rivalry among existing firms.
Porter also indicates that, in response to these five factors, a competitive strategy can take one of three generic forms: focus, differentiation, and cost leadership.
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