As there is no single widely accepted definition for the concept of business strategy, some of the most important definitions and perspectives that have emerged on the subject will be presented. The following table shows some of the most relevant definitions that have shaped the evolution of this concept over time.
Source: Roch (2024).
In addition to the above definitions, relevant perspectives on the concept and the different types of business strategy are presented below.
Mintzberg
Mintzberg (1987) states in his article “The Strategy Concept I: Five Ps for Strategy” that the word strategy has been implicitly used in many ways for a long time, even though it has traditionally been defined in only one way. He adds, in turn, that the explicit recognition of the existence of many definitions for this term can be helpful in this field.
Thus, Mintzberg presents the following five definitions of strategy: strategy as plan, pattern, position, perspective, and ploy.
Strategy as plan
For the vast majority of people we asked, strategy is a plan, i.e., a kind of consciously projected course of action. According to this definition, strategies have two essential characteristics: they are elaborated prior to the actions to be carried out, and they are planned consciously and intentionally. There are a multitude of definitions in this field of study that are aligned with this point of view.
Strategy as pattern
If strategies can be projected as plans, they can also be perceived from the resulting behaviour. In other words, strategy means consistency in behaviour, whether it is intentional or not. The fact is, while hardly anyone defines the word strategy in this way, it seems that many people at one time or another use it in this way. Every time a journalist attributes a strategy to a company, or every time a manager does the same to a competitor or even to the top management of the company he or she works for, what they are doing is implicitly defining the strategy as a pattern of action, i.e., inferring a consistency in behaviour and labelling it as a strategy. One can even go further and attribute an intention behind that consistency, that is, assume that there is a plan behind that pattern of behaviour, however that is only an assumption and could turn out to be false.
Thus, the definitions of strategy as plan and as pattern may be quite independent of each other: plans may not come to fruition, while patterns may appear without having been previously conceived. If we label the former definition as intended or planned strategy and the latter as realized strategy, one can then distinguish between deliberate strategies, in which previously existing intentions are carried out, and emergent strategies as patterns of behaviour in streams of actions in the absence of prior intentions or despite them. Thus, summarizing, the following basic distinction can be made (see Figure below):
- Intended, premeditated or planned strategy. Strategy is a plan, i.e., a consciously projected course of action (intentions).
- Unrealized strategy. Part of the intended strategy that is not carried out (unrealized intentions).
- Deliberate strategy. Part of the intended strategy that comes to fruition as initially conceived (realized intentions).
- Emergent strategy. Pattern of behaviour in a stream of actions, in the absence of or in spite of prior intentions.
- Realized strategy. Consistency in the organization’s behaviour, being the resultant of the two previous components (deliberate strategy + emergent strategy).
While intended or planned strategy focuses on control, i.e., on ensuring that the directive intentions are carried out as explicitly stated, emergent strategy emphasizes learning, in other words, the confrontation between thought and action when participants reflect on what they do (analysis and formulation –> action –> feedback [control] –> learning [feedback analysis]), so that over time a pattern of behaviour converges in the developed stream of actions that constitutes the strategy (emergent strategy) (Mintzberg et al., 1998).
It is important to note that realized strategies may be markedly deliberate (strategies realized as previously planned, i.e., in accordance with prior intentions), markedly emergent (strategies realized in the absence of or despite prior intentions), or partially deliberate and emergent (Roch, 2019).
Finally, and consistent with this classification, one can define a deliberate process of strategy creation (conscious and intentional strategic process), which gives rise to intended or planned strategies, deliberate strategies and unrealized strategies, and an emergent process of strategy formation which gives rise to emergent strategies. This issue (strategic process) will be discussed in more detail later.
Strategy as position
Strategy can also be defined as a position, i.e., as the location of the organization in its environment.
In ecological terms, strategy so defined is considered as a niche; in economic terms, a place that generates income; and in management terms, the market environment for the product, the place in the environment where resources are concentrated.
Strategy as perspective
This definition of strategy looks inside the strategist’s mind. In this case, strategy consists of an ingrained way of perceiving the business.
Strategy as ploy
Strategy, finally, can also be defined as a ploy or stratagem, i.e., as a particular manoeuvre designed to outwit an adversary or a competitor. According to Mintzberg (1987), these five definitions are complemented by adding important explanatory elements that help us to better understand the concept of strategy.
Bueno, Morcillo and Salmador
Bueno, Morcillo and Salmador (2005) propose a general concept of business strategy based on the following statements:
- Business strategy is the organizational response to the strategic challenge faced by the company.
- Strategy, therefore, represents the critical relationship function between the company and its environment, between its structural and behavioural elements and its competitive forces.
- Strategy, in short, is the pattern of behaviour within a given period, that reveals the organization’s purpose with respect to what it wants to be and do in order to implement the policies and actions that will enable its achievement.
If strategy has been defined as the response to the company’s strategic challenge, it seems logical, as shown in the following figure, that it should be represented as the relationship between the firm and its environment, between the values (culture), objectives, resources and capabilities, structure and systems of the organization and the competitive forces that shape its environment or field of activity.
This point of view should be complemented by pointing out that a company’s strategies, in addition to influencing its interrelationship with the environment, can also have an impact on its internal characteristics, as illustrated in the following figure. And so, in fact, it happens with some types of strategies that have a fundamental impact inside the organization, such as: innovation strategies for internal work processes and systems, internal restructuring strategies, etc.
Hofer and Schendel, and Venkatraman
Hofer and Schendel (1978) and Venkatraman (1989) indicate which are the aspects that help to delimit the concept of strategy:
- Scope of the concept. Establish whether the concept of strategy includes just the means or also the ends (objectives, goals, etc.).
- Hierarchical level considered: corporate strategy, business strategy or functional strategy. These three levels of strategy are linked to the different hierarchical levels of the company, so that the responsibility for each of them falls on different people within the organization, requiring adequate coordination to achieve coherence among them all.
- Domain. The strategy can be considered as the sum of different parts or holistically.
- Level of premeditation. It is possible to differentiate between the formulated strategy and the realized one.
Finally, and for illustrative purposes only, some examples of generic strategies that can be observed in general in companies are listed below:
- Localization strategy (geographical scope). Geographical location of the company’s different activities, which can be local, national or international (internationalization strategy).
- Strategies in the area of financing: Self-financing, external financing through loans and/or grants, external financing through the entry of partners in the company’s capital, etc.
- Strategies in the business model.
- Strategies in market positioning (technologies-products-markets in which the company operates).
- Strategies in the area of production of the products and/or services offered by the company: In-house, purchasing or outsourcing, etc.
- Strategies in the field of marketing (advertising, pricing policy and promotions, after-sales service and warranties, distribution and sales channels, etc.).
- Strategies in the field of innovation (research, development and technological innovation (R&D&I), innovation of products and/or services; innovation of processes, systems and work tools; innovation of strategy, etc.).
- Growth strategies: Organic growth, diversification, vertical integration, mergers and acquisitions, joint ventures, etc.
- Strategic alliances or cooperation agreements.
- Strategies in the area of human resources.
- Other strategies: Strategies in the field of corporate image, strategies in the field of corporate social responsibility, strategies in the environmental field, etc.
- Etc.
If you are interested in going deeper into the strategic process, allow me to recommend you: - Book: "The strategic process of the firm: Theory and cases" (Roch, 2024). - Courses and consulting program on the strategic process.
