Strategy has become a catchall term used to mean whatever one wants it to

mean. A strategy consists of an integrated set of choices. There is a fine line

between strategic threads and strategy. Important issues of organization like
compensation policies, information systems or training programs are not the part
of the strategy. So, considering the key important issues of organizations as a
part of strategy is not the right approach.

Elements of the Strategy

There are five key elements a strategy consists of :

Figure : Elements of the Strategy

Arenas

Vehicles

Where will we be active?

How will we get there?

Differentiations

Staging

How will we win in the marketplace?

What will be our speed and sequence of

moves?

Economic Logic
How long will we obtain our returns?

Arenas
The most fundamental choices strategists make are those of where or in what
areas the business will be active. In articulating arenas, it is important to be as
possible about the product categories, make segments, geographic areas, core
technologies as well as the value adding stages the business intend to take on.
An example has been given about a biomechanical company which intended to
use T-cell receptor technology to develop both diagnostic and therapeutic
products for battling a certain class of cancers. The company targeted the US
and European markets as geographic scope. The companys chosen arenas were
highly specific wit products and markets. In one word, its challenge is to be as
specific as possible.
Indicating not only where the business will be active but also how much
emphasis will be placed on each, is one of the major concerns while choosing
arenas. For defensive purposes, a strategy might be reasonably centred on one
product category.

Vehicles
Strategy also need to decide how to get into the arenas. In case of expansion, all
possible options of should be considered like internal product development or
joint ventures-acquisitions for achieving broadened scope. Selection of vehicles
should not be an after-thought as because implementation mostly depends on it.
There are some uncertainty while entering new product categories like licensing
other companies technologies or in terms of acquisitions where the company is
novice. Another problem is being failed to consider and articulate the intended
expansion vehicles which may result delayed entry, unnecessary cost addition or
totally stalled.

Differentiators
How the firms will win in the marketplace should be specified while developing
strategy. Differentiation generates positive results in this competitive market all
time. But the competitive advantage requires the employees of the companies to
make upfront, conscious choice about which weapons will be assembled, honed
and deployed to beat competitors in the fight for customers, revenue and profits.
Strategies that have been used by Gillette and Goldman Sachs have been added
as examples for better understanding. The competitive advantage of Honda also
has been discussed to give a clear view that how differentiation play role to
create tremendous customer belief and strategic position.
Differentiation ensures up front choices if the steps including this are followed
properly in the implementation of strategies. Sometimes top management
doesnt attempt to create unique differentiation which leads to utter failure from
the organizational point of view. Firms without differentiation loses. In selecting
differentiators, strategists should give explicit preference to those few forms of
superiority.

Staging
Decisions about staging can be driven by a number of factors.
Resources, urgency, achievement of credibility, pursuit of early wins are the
factors that might go into decisions about the speed and sequence of strategic
initiatives.

Product-Line Breadth

Brand Power

Economic Logic
Business strategies must be a clear idea of how profits will be generated. The
most successful strategies have a central logic that serves as the function for
profit creation. In some cases, the economic key may be to obtain premium
prices by offering customers a difficult to match product.
For better understanding, the competitive advantages that New York Times,
ARAMARK and GKN Sinter Metals have been discussed in this section.

The Imperative of Strategic Comprehensiveness

In this section, comprehensive strategies at IKEA and Brake Products
International have been discussed. That means how IKEA has brought an
revolution in the industry and BPI has changed their direction of business.