Is sometimes defined only as a firm’s high-level plan for reaching specific business objectives. Strategic plans succeed when they lead to business growth, a strong competitive position, and strong financial performance. When the high-level strategy fails, however, the firm must either change its approach or prepare to go out of business.
The brief definition above is accurate but, for practical help, many businesspeople prefer instead a slightly longer explanation:
Business strategy is the firm’s working plan for achieving its vision, prioritizing objectives, competing successfully, and optimizing financial performance with its business model.
Formulating Strategy is all about meeting objectives (Goals). In business, the strategy begins with a focus on the highest-level objective in private industry: Increasing owner value. For most companies, in fact, that is the firm's reason for being. In practical terms, however, firms achieve this objective only by earning profits. For most firms, therefore, the highest goal can be stated by referring to "profits." The generic business strategy, therefore, aims first to earn, sustain, and grow profits.
A Strategic Framework
The subject business strategy is easier to understand—to make coherent—by viewing each one as part of a strategic framework. The strategic framework is a hierarchy. At the top sits the firm's overall (or generic) business strategy. Here, the aim is the highest-level business objective: earn, sustain, and grow profits. Some may immediately ask: Exactly how does the firm achieve its profit objectives?
Indeed, most firms develop and use a rich and complex strategic framework. As a result, business strategy formulations are more explicit when they focus on these points: Specific business objectives for each strategy. Identifying which goals in the framework have priority over others. Mapping relationships between the various strategies. Showing, for example, which of them support others. This article, therefore, presents business strategies as components of a strategic framework.