Question

Explain why a company strategy is really a collection of strategies

Answer 1

In diversified, multibusiness companies, the strategy-making task involves four distinct types or levels of strategy i.e. Corporate Strategy for the company as a whole, Business Strategy (one for each business the company has diversified into), Functional-Area Strategies within each business and Operating Strategies. Typically, the strategy-making task is more top-down than bottom-up, with higher-level strategies serving as the guide for developing lower-level strategies. Hence the company's strategy is really a collection of strategies. It is important because if the company's strategy has the essence of other strategies then the organization's objective will become very clear and will be achieved easily and efficiently. Formation of a strategy involves stitching together a set to proactive and purposeful actions on the part of the company's managers and then modifying first one piece and then another as events unfold and circumstances surrounding the company's situation changes.

It is true that the managers need to consider both the result of its analysis of the company's external environment and the result of its evaluation of the company's resources and competitive position. This is because a company's strategy evolves over time as a consequence of the need to keep strategy matched to changing market conditions and changing customer's need and expectations and also of new managerial priorities and changing managerial judgments about what the best future course for the company is.