A strategy determines what an organization needs to do to meet business objectives. A plan outlines how the strategy will be executed. It may take the form of an outline, scheme, program, blueprint, or layout.
At the most fundamental level, strategies determine how a business will achieve its goals.
The best strategies are robust, flexible, and adaptable when circumstances change. Effective strategies allow the business to build critical momentum and secure a competitive advantage.
Strategies are often prepared when collaboration, innovation, and creativity are of the utmost importance.
They tend to facilitate healthy debate from both sides of the argument and clarify how a company will further its mission and vision.
Some of the key components of a good strategy include:
- Asking the right questions.
- Learning lessons from the past.
- Future predictions.
- Committing to change.
- Evolving when necessary.
- Determining how to integrate, and
- Analyzing potential pathways.
Note that every company should have an overarching strategy and not a set of strategies, plural.
Strategy encompasses a set of choices that determine where the company wants to be, how it intends to get there, and the skills, expertise, and systems that will allow it to win.
Tesla’s ambitions to become the most compelling car company in the world and accelerate the shift toward affordable, sustainable vehicles have been supported by one strategy.
The company entered the EV market at the premium end and is progressively reaching more price-conscious consumers via higher unit volume and lower prices.
Plans dictate how certain goals are achieved and tend to be final. In other words, an unsuccessful plan is more likely to be scrapped and a new plan devised.
Since plans are more difficult to adjust, they tend to take longer to develop because organizations work harder to ensure every detail is correct.
Most plans include detailed information on the following:
- The tasks and activities that need to be executed.
- Roles and responsibilities.
- A task and activity schedule, and
- Clarification on how the strategy can be performed on time and within budget. This incorporates risk, quality, resource, stakeholder, change, and financial management, among other disciplines.
Plans are useful when efficiency and timelines are important. They provide a coherent framework that enables the organization to move in the same direction and establish certain milestones that must be met along the way.
Plans also eliminate false confidence at the organizational level and increase transparency at the employee level as they leave no room for assumptions.
Various types of plans can support different parts of the strategy. These include financial, tactical, contingency, succession, and operational plans.
- A strategy determines what an organization needs to do to meet business objectives, while plans clarify how the strategy will be carried out.
- The best business strategies are robust, flexible, and adaptable when circumstances change. They are prepared when collaboration, innovation, and creativity are of the utmost importance.
- Plans dictate how certain goals are achieved and are more concrete in nature. Unlike a strategy that can be adjusted over time, plans need to be correct from the outset and if unsuccessful, it is better to move to Plan B than make alterations to Plan A.
Connected Strategy Frameworks
Related Strategy Concepts: Go-To-Market Strategy, Marketing Strategy, Business Models, Tech Business Models, Jobs-To-Be Done, Design Thinking, Lean Startup Canvas, Value Chain, Value Proposition Canvas, Balanced Scorecard, Business Model Canvas, SWOT Analysis, Growth Hacking, Bundling, Unbundling, Bootstrapping, Venture Capital, Porter’s Five Forces, Porter’s Generic Strategies, Porter’s Five Forces, PESTEL Analysis, SWOT, Porter’s Diamond Model, Ansoff, Technology Adoption Curve, TOWS, SOAR, Balanced Scorecard, OKR, Agile Methodology, Value Proposition, VTDF
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