Strategy

Strategy

The term "strategy" (Greek:  stratos = army, ago = lead, strategos = general) was taken from military terminology and it implies the army leadership, together with appropriate course of action towards which appropriate activities are directed. 

Strategy and tactics (Greek: taktikos = readiness for line-up, takto = orders) are closely connected. Both of them refer to a regular usage of certain devices in time and space, where strategy refers to the aim and tactics to the ways certain goal is achieved.

According to many authors, there are four basic components of strategy:

1. Area of doing business makes the market where production–business system  is going to compete.
2. Arrangement of resources is the part of strategy which marks the way of their allocation in different areas (into which areas to invest and how much, or not).
3. Specific competences are the things which make production–business system articularly different from their opponents. These are basic competences which give competitive advantage – superiority in researches, leadership in technology, efficiency in production, distribution etc.
4. Sinergy is the expected result of decisions in the field of business, arrangement of resources and specific competences. In that sense, it should show how different areas of business can be complementary, creating the additional effect. 

Strategic management

Strategic management is a process through which managers establish long-term directions of production–business system  set specific goals of future performances, develop strategies in order to achieve these goals which include all relevant internal and external circumstances and take actions aiming to carry out given plans, i.e. the process in which organizations estimate their strengths and weaknesses, identify present and future needs of customers and authorize managers and employees to ensure products and services to satisfy all these needs. 

Management should answer the following strategic questions:

- where are we now,

- where we want to be and

- how to get there.

Strategic management = Strategic planning + Implementation of strategic plans + Strategic control

Basic types of strategy

Basic types of strategy, concerning the organizational level on which strategies are made, are:

(1) Social Responsibility Strategy – the concept in which companies integrate taking care of society and environment with their efficiency. It is the key element of the strategy of company aiming to maintain and improve competition, thus making new partnerships and spreading existing cooperation within companies concerning social dialogue, gaining skills, equal possibilities, predictions and managing of changes. It strengthens the economic and social cohesion on a local or a national level. On a global level, it contributes to the protection of environment and respecting basic human rights.

(2) Corporate Strategy – strategy of establishing the mission of PBS as a set of organizational goals used to give a detailed description of the purpose of existence and a desired direction of PBS. It is connected to the choice of business orientation of PBS, i.e. to the choice of ways of "entering" the system into business activities, as well as ways of doing business in a chosen activity.

(3) Business Strategy – a specific type of strategy which establishes norms and actions of PBS aiming to achieve goals within a chosen business activity. It is directed towards achieving strategic competitive advantages using different models, among which the most famous ones are Porter’s model and a model of life cycle of product.

(4) Functional Strategy – a strategy which deals with operationalization of business strategy. It is formed on the level of certain business (organizational) units, as well as on the level of strategic business units:

• Marketing strategy: market segmentation, product positioning, marketing mix, distribution channels, selling promotion and price policy.
• Financial strategy: capital structure, capital acquisition, capital allocation, dividend policy and activa management.
• Production strategy: production improvement, production planning, equipment location, control and quality.
• Research and development strategy: product development, production development, organization development, technological prediction, patents and licenses.
• Human potentials resources: performance quality, recruiting policy, development and promotion of employees and compensation policy.

Read more in book: Strategic Management in the Garment Industry

http://www.woodheadpublishingindia.com/BookDetails.aspx?BookID=35