Who needs strategy?

A very fundamental question!

There are some very fundamental assumptions that people often need to understand when it comes to answering this one. It is common belief that if the corporation has a strategy every single function in that corporation needs a strategy that cascades down from the corporate strategy. I am not sure that is really the reason! I say that with a passion only because strategy is probably one of those OVERLY ABUSED words in business.

So why does every function and organization in a corporation need a strategy? More importantly why does the corporation itself need a strategy? Now that one is simple… to create a competitive advantage in positioning itself in the market place, as it deliver a quality better than its competitor and at a cost lower than its competitor for the betterment of its consumer. Better quality and lower cost means a larger share of the market and greater profits to the corporation. Mind you the key here is the word “MARKET”, its size and scope.

The inherent assumption in the statement is that the comprehensive selections of choices to be made are beyond the capacity of the corporation to explore simultaneously.

So obviously a corporation that has a monopoly does not need a strategy, since there is no competitor. So also if the quality cannot be improved and costs can no longer be lowered either through a judicious selection of choices then the product offering is a commodity and profits can only be increased through a smart acquisition of customers or expansion of the size of the market.

So as the corporation tries to make these choices organizations within the corporation that support its existence need to make equivalent choices in order to enable the corporation to meet its strategic goals. Likewise if a function within an organization has over capacity and is able to simultaneously explore every potential option there would be no need for a strategy!

But then the corporation should find a way to trim the unnecessary fat.