We will look at an in depth definition of what strategy means in a business context. To understand this is to understand the business environment, and the importance of having sound strategies when operating any form of enterprise. There are several different categories of business strategy, some more important than others. In particular the resource based view of strategy is worth expanding on. Furthermore we will unravel the environmental factors to which a business must respond strategically, analysing the way successful strategists identify and plan around current market positions. With any business, having a well realised identity and sense of self/image is paramount, as we will see in the way successful strategists have a specific and succinct idea of what direction their business is headed in.
Strategy, from the point of view of those immersed in the world of business, is the vision which defines the objectives of an entity (Markides, 2004). This is an extremely broad definition of the term, to really understand strategy one has to look beyond the basic objectives of a business, and see just how entrenched in almost every facet of a working business the concept of strategy really is. Differing sources agree that strategy consists of several aspects, that it be a) explicit, b) developed carefully and with intent, and c) made in advance for some future goal or decision (Mintzberg, 1978). This is to say that strategists will come up with a clearly defined visualisation of where they want the business to move, and how they will achieve this. Mintzberg (1978) maintains that as soon as several decisions show some consistency in trending towards a common goal, strategy has been formed. To be successful, strategy should be distinctive to the company's market position, but we will touch on that in greater depth later. Clear parameters are important to a successful strategy, otherwise the ideal forward movement of a business can descend into chaos (Markides, 2004).
The business environment is a highly competitive one, which emphasises the importance of effective strategy. To this end, a business must be well informed of the environment in which it is operating. This environment can range from a narrow market segment to very broad. Mintzberg (1978) determines that the market can be understood better with research. The research method consists of several steps; collection of basic data, inference of strategies and periods of change, intensive analysis of periods of change, and a theoretical analysis. The first step pertains to businesses becoming better informed about important trends and events in the environment, and what important decisions they need to make in response to this. Inference of strategies and periods of change refers to the analysis of market trends and division of factors into distinct patterns from which a generalisation of the market can be made. This is refined in the third step, intensive analysis of periods of change, where the broad overall perception is superseded with intensive investigation of specific periods. Finally the theoretical analysis gives rise to important questions and commentaries which can help strategists fully realise their methods and end goals (Mintzberg, 1978). The bottom line is that to understand your competitors, yourself and how you all relate on the whole, you need a full and comprehensive understanding of your environment.
We see that strategy is possibly the most important factor in defining a business' long term success within its market segment. When there is no solid series of steps for a business to follow (both in the short and