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Three Forms of Strategy

General, Corporate & Competitive Strategy

Much of what consultants do can be and is
done off site. It is work that can be taken
home. This is especially true of the kinds of
"skull work" involved in activities known as
"analyzing" and "designing" and in
developing work products such as training
materials, point papers, meeting designs,
reports and executive briefings.
At Distance Consulting, we specialize in
researching topical issues and other matters
of interest to managers, executives and
consultants. In short, we can do a lot of
your "homework" for you.
On-site assistance is provided whenever the
work requires it.

[email protected]

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 Three Forms of Strategy

My work affords me the opportunity to study related topics. In this case, As a practical matter, strategy evolves over time as intentions accommodate
the topic is strategy. Feedback from clients and colleagues suggests that at reality. Thus, one starts with a given perspective, concludes that it calls for
least some of what I've learned from my studies is useful to others. Hence, a certain position, and sets about achieving it by way of a carefully crafted
this paper. It has not been published. plan. Over time, things change. A pattern of decisions and actions marks
movement from starting point to goal. This pattern of decisions and actions
Objectives is called "realized" or "emergent" strategy.
Keep one ear open in almost any business environment and the term
"strategy" is sure to crop up on a regular basis. Unfortunately, those using Strategy in General
the term frequently fail to define the way in which they are using it. Nor do Strategy, in general, refers to how a given objective will be achieved.
those hearing it bother to check to see how it is being used. As a result, Consequently, strategy in general is concerned with the relationships
conversations about strategy can become confusing. between ends and means, that is, between the results we seek and the
resources at our disposal. Strategy and tactics are both concerned with
There are at least three basic formulating and then carrying out courses of action intended to attain
forms of strategy in the business particular objectives. For the most part, strategy is concerned with
world and it helps to keep them General deploying the resources at your disposal whereas tactics is concerned with
Strategy
straight. The objectives of this employing them. Together, strategy and tactics bridge the gap between
brief paper are to clarify the ends and means (see Figure 2).
general concept of strategy and
draw attention to the importance
of distinguishing among three Corporate Competitive
forms of strategy: (1) general Strategy Strategy STRATEGY & TACTICS
strategy (or just plain strategy)
(2) corporate strategy and (3)
competitive strategy (Figure 1).

The Concept of
Figure 1 - Three Forms of Strategy DEPLOY EMPLOY
Strategy
The many definitions of strategy
found in the management literature fall into one of four categories: plan, ENDS MEANS
pattern, position, and perspective. According to these views, strategy is:

1. A plan, a "how," a means of getting from here to there.

2. A pattern in actions over time; for example, a company that regularly
markets very expensive products is using a "high end" strategy.
3. A position, that is, it reflects decisions to offer particular products or
services in particular markets. Figure 2 - "Bridging the Gap"
4. A perspective, that is, a vision and direction, a view of what the
company or organization is to become. Although it is not my aim to draw definitive distinctions between strategy
and tactics, it is next to impossible to say something about one without also

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 Three Forms of Strategy

saying something about the other. The table below summarizes some of the Michael Porter, a Harvard Business School professor and the reigning guru
more important differences I’ve noted in my studies and observations of of competitive strategy, competition within an industry is driven by five
strategy and tactics. basic factors:

Strategy Tactics 1. Threat of new entrants.

2. Threat of substitute products or services.
3. Bargaining power of suppliers.
Scale of the Grand Limited
Objective 4. Bargaining power of buyers.
5. Rivalry among existing firms.
Scope of the Broad & General Narrowly focused
Action Porter also indicates that, in response to these five factors, competitive
strategy can take one of three generic forms: (1) focus, (2) differentiation,
Guidance General & Ongoing Specific & Situational and (3) cost leadership.
Provided
Other Factors Affecting Corporate and Competitive
Degree of Adaptable but not hastily Fluid, quick to adjust and
Flexibility changed adapt in minor or major ways Strategy
Other writers on the subject of strategy point to several factors that can
serve as the basis for formu lating corporate and competitive strategy. These
Timing Before Action During Action factors include:

Resource
• Products-services offered • Natural resources
Deployment Employment
Focus • Sales-marketing methods • Production capacity-capability
• Users-customers served • Size/growth goals
• Distribution methods • Technology
Strategy and tactics are both terms that come to us from the military. Their • Market types and needs • Return/profit goals
use in business and other civilian enterprises has required little adaptation as
far as strategy in general is concerned, however, corporate strategy and
competitive strategy do represent significant departures from the military Recently, "value disciplines" have been suggested as the basis for settling
meaning of strategy. on strategy (corporate or competitive). The three basic "value disciplines"
are:
Corporate versus Competitive Strategy
Corporate strategy defines the markets and the businesses in which a
Operational Strategy is predicated on the production and delivery of
company will operate. Competitive or business strategy defines for a given Excellence
business the basis on which it will compete. Corporate strategy is typically products and services. The objective is to lead the
decided in the context of defining the company’s mission and vision, that is, industry in terms of price and convenience.
saying what the company does, why it exists, and what it is intended to
become. Competitive strategy hinges on a company’s capabilities, strengths,
and weaknesses in relation to market characteristics and the corresponding
capabilities, strengths, and weaknesses of its competitors. According to

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 Three Forms of Strategy

Customer Strategy is predicated on tailoring and shaping products Related to • What is the current strategy, implicit or
Intimacy and services to fit an increasingly fine definition of the Corporate Strategy explicit?
customer. The objective is long-term customer loyalty • What assumptions have to hold for the current
and long-term customer profitability. strategy to be viable?
• What is happening in the larger, social,
political, technical and financial environments?
Product Strategy is predicated on producing a continuous • What are our growth, size, and profitability
Leadership stream of state-of-the-art products and services. The goals?
objective is the quick commercialization of new ideas. • In which markets will we compete?
• In which businesses?
• In which geographic areas?
Some Fundamental Questions
Regardless of the definition of strategy, or the many factors affecting the
choice of corporate or competitive strategy, there are some fundamental Related to • What is the current strategy, imp licit or
Competitive
questions to be asked and answered. These include the following: explicit?
Strategy
• What assumptions have to hold for the current
strategy to be viable?
• What is happening in the industry, with our
Related to Mission • Who are we? competitors, and in general?
& Vision
• What do we do? • What are our growth, size, and profitability
• Why are we here? goals?
• What kind of company are we? • What products and services will we offer?
• What kind of company do we want to become? • To what customers or users?
• What kind of company must we become? • How will the selling/buying decisions be made?
• How will we distribute our products and
services?
Related to Strategy • What is our objective? What are the ends we • What technologies will we employ?
in General seek? • What capabilities and capacities will we
• What is our current strategy, implicit or require?
explicit? • Which ones are core?
• What courses of action might lead to the ends • What will we make, what will we buy, and
we seek? what will we acquire through alliance?
• What are the means at our disposal? • What are our options?
• How are our actions restrained and constrained • On what basis will we compete?
by the means at our disposal?
• What risks are involved and which ones are
serious enough that we should plan for them?

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 Three Forms of Strategy

Summary Recommended Reading

The preceding discussion asserts that strategy in general is concerned with Much of the preceding discussion is drawn from many well-known sources.
how particular objectives are achieved, with courses of action. Corporate To list them all would entail inserting an extensive bibliography right about
strategy is concerned with choices and commitments regarding markets, here. Instead, I’ve chosen to list what I consider some "essential" readings.
business and the very nature of the company itself. Competitive strategy is
concerned with competitors and the basis of competition. These basic points 1. Competitive Strategy (1986). Michael Porter. Harvard Business School
are illustrated in Figure 3. Press.
2. The Concept of Corporate Strategy, 2nd Edition (1980). Kenneth
Andrews. Dow-Jones Irwin.
3. "Customer Intimacy and Other Value Disciplines." Michael Treacy and
Corporate Competitive Fred Wiersema. Harvard Business Review (Jan-Feb 1993).
Strategy
Strategy Strategy 4. The Discipline of Market Leaders (1994). Michael Treacy and Fred
Wiersema. Addison-Wesley.
5. The Rise and Fall of Strategic Planning (1994). Henry Mintzberg.
Basic Books.
6. Strategy (1967). B. H. Liddell Hart. Basic Books.
7. Strategy: Pure and Simple (1993). Michel Robert. McGraw-Hill.
8. Top Management Strategy (1980). Benjamin Tregoe and John
Courses of Choices & Competitors & Zimmerman. Simon and Schuster.
Action Commitments Competition 9. "What is Strategy?" Michael Porter. Harvard Business Review (Nov-
Dec 1996).
Ÿ The relationships Ÿ Businesses PORTER
between ends Ÿ Markets Ÿ Cost About The Author
and means Ÿ Products Ÿ Differentiation
Ÿ Services Ÿ Focus Fred Nickols is a writer, consultant, and executive who lives and works in
the Princeton, New Jersey area. He may be reached by phone at (609) 820-
TREACY & WIERSEMA 0624, by mail at 108 Endsleigh Court, Robbinsville, New Jersey 08691 and
Ÿ Operational
Excellence
by e-mail at [email protected].
Ÿ Customer Intimacy
Ÿ Product Leadership

Figure 3 - Focal Points of Strategy

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