What is Strategy?

Strategy is the way to achieve the long-term goal of an organization. It is a high-level plan for a long-term objective. It is based on the entity’s objectives, analyzing the competitive environment, assessing internal capabilities, and determining the best course of action to gain an advantage or solve a problem.

So, strategy determines basic long-term goals and objectives of an entity, adopts a course of action, and allocates required resources to achieve the set goals and objectives.

Strategy focuses primarily on determination of basic long-term goals and objectives, adoption of a course of action, and allocation of resources for carrying out the set goals and objectives.

Organizations formulate strategy to set directions to outperform competitors.

Mintzberg’s Five Dimensions of Strategy

Mintzberg (1987) provides five dimensions of strategy:

• Plan
• Ploy
• Pattern
• Position
• Perspective

1. Plan

It refers to setting some sort of consciously intended course of action, guidelines to deal with situations. It has two characteristics — it is developed purposely and in advance.

Tools: PEST Analysis, SWOT Analysis, Change Management Techniques

2. Ploy

Every business has competitors and avoiding competition is not possible. So, businesses employ specific tactics to try and outperform or disrupt competitors.

Ploy tends to be short-term tactics and gives importance not to competitors but to the business’s own strategy.

Tools: Scenario Planning, Game Theory, Future Wheel

3. Pattern

A business entity or organization gets the idea of strategy from its everyday actions taken. It analyzes the historical pattern of actions, performance, and behavior, and then selects the patterns that should continue or be enhanced. Plan is the intended strategy; pattern is the realized strategy.

Tools: Core Competencies Model

4. Position

Where the organization sits on the playing field relative to competitors — how it positions itself in the competitive environment or marketplace.

Tools: PEST Analysis, Value Chain Analysis, Porter’s Diamond Model

5. Perspective

This is about internal organizational perspective or culture — the attitude of employees or a shared, innovation-focused culture.

Tools: Core Competencies Model, Trompenaars Cultural Dimensions

Mintzberg argued that understanding these five different perspectives of strategy provides a richer and more comprehensive view of what strategy truly is and how it is formed within organizations.

Financial Reporting - Key Standards

This section includes notes on IFRS, IAS, and their impact on financial statements...