While seeking a successful supply chain, chances are that one of the first three things every “consultancy” will mandate is the need for “supply chain strategy”, which must be in-line with the “business strategy”, where strategy is defined, on Wikipedia, as a plan of action designed to achieve a particular goal. But what does it entail? And how is it achieved?
It’s a good question, and one that Walter Kiechel III tried to answer in Seven Chapters of Strategic Wisdom over on Strategy+Business with his shortcut to the big themes in the conversation about corporate strategy. In the article, he offers a review of the best writing on strategy: not books, but seven of the best chapters from books related to the topic which covers the main definitions and arguments put forth by:
- Alfred D. Chandler Jr. in Strategy and Structure: Chapters in the History of the American Industrial Enterprise, 1962
- Kenneth R. Andrews in The Concept of Corporate Strategy, 1971
- Michael E. Porter in Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1980
- Thomas J. Peters and Robert H. Waterman Jr. in In Search of Excellence: Lessons from America’s Best-Run Companies, 1982
- Richard N. Foster in Innovation: The Attacker’s Advantage, 1986
- Andrew S. Grove in Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, 1996 and
- Henry Mintzberg in The Rise and Fall of Strategic Planning, 1994.
In essence, these “critical chapters” in strategic history defined strategy as:
- the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals;
- the pattern of major objectives, purposes or goals and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be;
- that which provides competitive advantage (which, in Porter’s viewpoint, basically boiled down to the pursuance of cost leadership, differentiation, or narrow focus on a geography, territory, or product segment);
- an emergent property that begins with the hand the organization has been dealt and goes from there, with all the existing strengths and weaknesses, setting off in a general direction where the organization runs into reality — including markets, products, and competitors that don’t behave the way the organization expects them to, learn from organizational mistakes, make corrections, and “execute like hell”;
- an exercise in pattern recognition, which is often centred around emerging technology and its “S” curve;
- an attack mentality, even if it means innovating to supplant current organizational technology; and
- a means of getting past the fallacies of predetermination, detachment, formalization, and marketing myopia.
However, a strategy:
- has to indicate how the long-term goals translate into short term actions;
- has to address geography and internationalization;
- could also be differentiated in terms of service, environmental impact, or market definition;
- has to be proactive as well as reactive;
- has to be able to shape patterns as well as recognize them;
- has to be defensive as well as offensive; and
- has to account for the unknown.
Thus, these definitions, on their own, are not a sufficient definition of strategy. So what is? And given a definition, how is a strategy created? Part II will explore some other definitions of strategy and arrive at a working definition of business strategy.