If we were to collect information on the literature directed to management and strategic direction, we would find that the word strategy is the most used, approached and of what has produced many theories, controversies, schemes, congresses and expositions of the subject.
If I asked you what you mean by strategy, you would surely answer the following:
- It is usually used to create a competitive advantage in the short or long term depending on the strategic projection of the company. It is used to create brand and image construction. Positioning Competitive differentiation Entering new markets Obtaining more clients and loyalty to current ones Obtaining advantages to level of products and services
Which of these answers seems correct to you?
All these answers provided are correct in part since they are directly or indirectly related to it.
But in itself, what does the word strategy mean? This term comes from the Greek language and if we analyze the etymology, it is an expression that refers exclusively to combat, for which the word "strategos" means that the driver is the one who stipulates the action to be implemented and the direction of the army in battle..
It must be understood that the strategy is not an isolated act, it is a chain of elections that runs throughout the company, involving all the aspects that make its operation.
The very nature of the strategy encompasses:
- Decision making Organizational progress Adaptation to changing the environment Fulfillment of goals and objectives
All these guidelines indicated are built through a strategic course that makes up 4 essential stages:
Strategic analysis: Understanding the current situation of companies.
Strategic planning: That is, the selection of courses of action to follow to achieve the purposes.
Strategic implementation: The process of preparing the different actions foreseen in the plans.
Strategic control: The set of adjustments and corrections to be made during the implementation process to stay on track.
But what about companies? Do they have a clear concept of the strategy? Its leaders, who determine the daily maneuvering of organizations, find themselves lost in the face of such turbulence, persistent changes in the international economy and a threatening growth of an increasingly harmful globalization worldwide that it is difficult for them to carry out an exhaustive strategic analysis of the organization.
The strategy is not directly determined by the option that senior management decides, it is not just about choosing differentiation or leadership in costs, hybrid or value-added strategy, it has a much more complex scope.
Just as in the military field, the strategy is based according to the warlike power that a country possesses, the same happens with companies, the strategy is always based on the resources that the company has and that it can really face the goals and guidelines. outlined in the time you think necessary to achieve the desired objective.
There are several levels of strategies:
The first is what is known as corporate strategy, involves those decisions that will reach the entire company, are generally concentrated in senior management and its main purpose is to create and maintain a balance of business portfolio. At this level the vision, mission of the company and general policies for the development of the organization are established.
Competitive strategy: These are the decisions specific to each business unit. Its purpose is to create and maintain a position against the competition, its main functions are: Competitive approach, expansion actions, attacks and defenses against the competition.
And finally, the functional strategy is the one that is classified for each particular business unit that aims to provide operational support for each area of the company.
In itself, the strategy must be seen not from an imaginary paradigm, but embodied in reality with actions that its employees make consider that strategy alive, notoriously with the highest level of coherence and consistency between the levels of decision.
In the war field, when the commander decrees the orders, the soldiers know what strategy they are going to use for the goal to be achieved, if they have to attack from the rear, if they are going to do it from a weak flank, or a head-on battle, which What if the soldiers did not know what to do when they were in the middle of battle or simply that each soldier independently deciphered and did a different thing and shot dead to kill or preserve his life, would it really be the desired result? Amazingly, some companies manage this way, when they are not alarmed by their strategy or simply leave it to chance.
Deliberate strategy is generally not put into practice with few exceptions, it is often the case that certain companies take the wrong path or stray from their strategy.
In order to implement a real strategy, you must know what real resources are available.
The strategy is related to resources directly since there are strategic restrictions to implement.
If a company tries to position itself as a leader, if it does not have the resources available to achieve it, it is not going to be operable, so propose it and have the best strategy to implement or have a potential intellectual qualifier in your employees.
Reality also marks that companies must have a clear skill despite having no excuse, they must have a transcendental plan to achieve results.
It is like driving on the road and not being on the right path to go to the place we want and not having the slightest idea of the path we take is the wrong one.
The idea then is a practical guide to strategic indices that can be seen, quantified and performed on a daily basis so that it is not something metaphorical.
The answer to inquire is adjusted to the availability of the company,
Suppose a company wants to enter the beverage market, but does not have an appropriate infrastructure or does not have a strong image in the market, it would be nonsense to want to position itself as leader or challenger in the market when you do not have the resources to face that challenge.
A company would be able to opt for a penetration strategy income with low prices to join a market niche and position itself as such, is what the Vaneduc group did a family business that was in the educational market since 1960, its diversification made them expand towards the creation of a university. But how to compete in a market where it is very competitive and it is complex to position yourself?
The strategy consisted of low prices and good educational quality, but its core strategy was a mix of word-of-mouth viral marketing and low-price penetration.
The recommendations of professors to students and of these same to others made a strong growth in the university that made it possible to open branches in different parts of the country, the growth was profitable so it positioned itself strongly in its niche thus creating a strong corporate image.
The strategies can be maintained over time is what is called a "linear strategy" that will depend on the market where it operates, whether it is unstable or not, whether it has sufficient attractiveness to attract investment, the instability it has, the type of turbulence and the existing competitive force.
There are inconstants that make a company to modify its strategy, it is what is known as "incremental strategy", when a company sees its strategy at risk, or the market where it operates becomes unstable, it chooses to alter it, and This way it becomes a new strategy, transformed and adapted to change.
The very nature of the strategy is built by resources and strategic innovation.
The reality of the strategy itself then depends on two factors:
1) The organization's resources
2) The topology and strategic innovation
Both factors go hand in hand, its success does not depend on each separate variable, but combined with each other.
Both the implementation and the innovation and the resources that the company has are the 2 key success factors. But these controllable variables only gather 50% success in favor, the remaining 50% will depend on the environment.
Therefore, all these factors are relative in terms of the efficiency of the implementation of the strategy.
Even so, with an unforeseen environment, many companies seek to grow, but how to achieve it in the face of uncertain instability in the environment? What kind of strategies and tactics do you need to know in order to be successful? We will now list the existing orthodox topology.
Elimination of strategic impositions:
This model can be an organizing principle and of good results.
The impositions are concessions that the clients have no other remedy or option to do or accept respectively. Let's see an example: a garage forces a client to leave their car for a minimum of three hours of stay, even if they stay an hour or two hours, the price does it will vary it will be the same. Therefore the impositions are in this way or in no way, normally the clients determine that the sector is right and accept the payment they have to face.
Henry Ford did the same in the automotive industry, his customers could not choose to choose a color of the car to buy, with his famous motto of any customer can decide the color of his car as long as it is black, determines a strategic imposition.
Probably some of the best tax removal ideas was by Forum.
General Motors offered the customer's free choice of color, what would have happened if Ford had not adjusted to the changing environment or eliminated this imposition?
Today we see that the automotive industry has changed, not only do they offer colors, but also the type of car that the customer wants, whether five doors or three doors.
Despite all kinds of options or innovations to remove all kinds of restrictions or impositions in the right circumstances, it has a lot of power for an organization to grow, you have to think as clients and not as CEOs to find and take advantage of the impositions to achieve a rapid increase and good profits
Value innovation:
We have a juncture of a conventional strategy and that of value innovation, both differ in the basic and complex dimensions of the strategy.
The conventional strategy is based on the conditions that prevail in the environment as impossible to change, they let the competition establish the parameters of their strategic thinking, the innovation of strategic value does not use the environment or its reference rivals.
It seeks the common interests of clients.
Let's see the following table the differences of the two strategic logics:
This type of strategy based on value innovation establishes growth planning, benefits in an economy of fixed changes that allows us to analyze the restructuring that is needed to change the paradigm and leave the structure that encloses us and does not allow us to see where modern business is headed.
Growth through the acquisition of companies:
Many companies opted for growth in this way, buying companies from different types of businesses that function as a Holding.
The competitive advantages that a company can obtain by opting for this type of strategy are based on the following:
- Increased intellectual capital Liquidity Increased assets Increased customer acquisition and new segments to operate New brand acquisition Cost reduction
But when one examines the cultural aspect it turns out that it is the most important thing to consider.
Let us suppose that General Electric incorporates a new company, it is necessary to know that the integration does not end after the agreement is consummated but quite the opposite since it is an earlier step, because of this statement it has its roots in the illustrative aspect since cultural assumptions and adaptability must be adapted.
This is something that managers often carefree and disregard when analyzing results and poor ability to respond to demanding customer concerns.
For an integration to be successful it must merge not only the various technical aspects of the business, but also the dissenting cultures, what then is the best way to achieve it? Employees will have to work together as soon as possible to solve the company's problems and achieve results that previously could not be achieved.
As we have seen in this orthodox growth topology, the central strategies seen in this work are the coordinators for a company to function efficiently, needless to say that there are articles, books and theories of various topologies, in my opinion the orthodox is the most effective in implementation.
The other virtual type topology also covers the increase in productivity and economic growth of organizations, but we would have to analyze the virtual chain, supplementary services and strategic diversification that is not the interest of this article.
Throughout all the above we have seen all the incidence caused by the determination of a strategy in the direction of a company, and its axiomatic results, since the useful life of an organization depends on several factors, but the strategy is without place. to doubt the motor nerve of a company for survival in the changing world of business, to say goodbye I would be delighted to do so with a famous phrase from the Author Gay Hamel
"Strategy is not everything, but it is the most important thing"
