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What is Strategy?

The Origins of Strategy

The term strategy, has been traced back to Athens, 600BC, from the Greek, 'strategos', which was coined to name a new military and political leadership position. The first written works are attributed to the Chinese military philosopher Sun Tzu, in the critically acclaimed work, The Art of War, written in 400 B.C. Subsequently, the concept appeared in various writings, with one of the most famous Latin works in military strategy written by Frontius, with the Greek title of Strategema, which literally means “tricks of war”.

Strategy in the business context however, emerged in the United States in 1960s, with the publication of the book, 'Corporate Strategy' by the Russian-American mathematician and business manager, Igor Ansoff. A number of adaptations followed led primarily by Harvard Business School, as other academicians and business writers developed new frameworks and analyses, including Alfred Chandler, who famously introduced an implementation perspective to the study of Business Strategy.

Today, the term is well recognised, though often misunderstood; with most businesses purporting to implement a strategy in some shape or form. The absence of a formal strategy management process is the most common route to business failure, since in its most basic sense, strategy seeks to introduce a structured approach to business planning.. 

The Most Overused Word in Business?

The success of an organisation is determined by identifying, developing, and adopting effective strategies. Yet, the term remains a widely misunderstood concept. The 2005 HBR article, 'All Strategy is local', opens with an enlightening statement -‘“Strategic" is the most overused word in the vocabulary of business. Frequently it’s just another way of saying, "This is important."’. Today, it remains an enigmatic term for many, nevertheless, there is broadening consensus that mastering strategy is critical to business success, leading to extensive research and debate regarding its definition, its scope, and its underlying processes.

Strategy in Practice

In its full context, strategy affects virtually all aspects of a business, and today draws upon fundamental business concerns, including finance, economics, marketing, sociology, psychology, and more.  Both researchers and practitioners agree that strategy is best analysed by reconciling these different points of view for a balanced and rounded perspective to avoid the pitfall of selecting a strategy which appears sound on economic grounds, it is rendered unreasoned on sociological or cultural grounds.

Further developments creating a fundamental shift in the way strategy is approached today compared to the last century is the increasing complexity deriving from modern-day disruptive forces - technology advancements, investment concerns, globalisation, increased competitiveness, and other factors. These components contribute to creating novel pressures which have the impact of accelerating the time horizon for strategic planning, whilst also amplifying the scope and complexity of issues to be brought into strategic considerations.

The Meaning of Strategy

The ubiquitousness of strategy means that no common description will suffice, and whether amongst researchers or business practitioners, its meaning and definition is not universally agreed. Due to this lack of unanimity, individuals may select from the ever expanding list of definitions proffered by various leading experts. This may include a succinct interpretation such as, 'Strategy is how you plan to create value'; or more comprehensive propositions. It is right to say therefore, that there is no 'perfect' definition, yet, the scope of the definition nominated will determine the breadth and depth of the strategic analysis.

A Robust Definition

'Strategy is the long term direction of an organisation, formed by choices and actions about its resources and scope, in order to create advantageous positions relative to competitors and peers in changing environmental and stakeholder contexts.’

A Guide for Strategy

From a cursory glance, the above Exploring Strategy definition may seem rather lengthy or grandiose. Upon a closer inspection however, it uncovers a comprehensive guide about what strategy should do -

i- Term - It should have a long term outlook;
ii- Output - It should offer choices leading to actions about available resources and scope;
iii- Aim - It should seek to create advantageous positions;
iv- Parties - It should offer a view on competitors, peers and stakeholders; 
vi - Context - It should consider the changing environmental and stakeholders of the business.

Subsequently, we may conclude in brief, that the aim of strategy is to facilitate an informed assessment of a range of tangible and intangible, financial and non-financial factors, with the goal of delivering an advantageous outcome.

The Three Branches of Strategy

Conventionally, the intricate subject of strategy is analysed with the aid of various tools, models, concepts, and frameworks which have been developed over recent decades by numerous academics and researchers. There is however, broad consensus that it is best viewed under three main branches, which though distinct in emphasis, are taken to be iterative and interdependent - 

CONTEXT: The WHO question -This examines the company's positioning; what it stands for, and its identity; the various factors which influence its internal and external environment, including: macroeconomic and industry-specific factors, as well as other unique characteristics such as its culture, and other sociological factors that define it.

CONTENT: The WHAT question - This explores the merits of the different strategies possible, and the likelihood of achieving a desired outcome under the given conditions. This is particularly concerned with identifying the most advantageous competitive and expansion strategies, and typically relies on technical strategy tools and models to evaluate each alternative. 

PROCESS: The HOW question - This involves the planning and implementation of the chosen strategy, and concerns not only the analytical and scientific processes, but also the human sociological and psychological factors. This acknowledges that the success of a strategy is dependent on carefully managing formal and informal systems using the right tools and skills. 

Strategy at A New Level

At A New Level, we believe that strategy is about discovering how to optimally manage your resources and capabilities, to create sustainable value, and gain an advantage relative to competitors. A comprehensive strategy should be distinct and discernible, and requires an integrated and interconnected approach to define who you are, what you should do, and how you should do it.

We developed the TEN LEVERS of Strategy Framework, underpinned by our innovatory AI-powered strategy tool, to help develop robust and forward-thinking strategies, that can respond to the unprecedented and demanding challenges of today. The model is built on ten specificities that form the distinct characteristics of luxury goods and services, and thereby translate synchronously into the strategic 'levers' that define and strengthen competitive advantage. This provides the basis for an objective assessment and scoring mechanism, which identifies strengths and weaknesses, and highlights areas for improvement.

The unparalleled challenges dispensed by the present climate, simultaneously conceal unequalled opportunities for discerning incumbents, Our goal is to work with businesses who are keen to discover progressive and innovative new possibilities which will create advantageous positions leading to superior and sustainable results.

Contact us to discuss how the TEN LEVERS of Luxury Framework can support your business strategy.

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