What Is Strategy?

Written: 15 February 2025

Strategy is one of the most widely used concepts in business and leadership, yet it does not have one universally accepted definition.

Henry Mintzberg illustrates this challenge through the analogy of people encountering different parts of an elephant and describing the whole according to the part they can perceive. Strategy can be understood in much the same way: different perspectives reveal important dimensions of strategy, but no single perspective necessarily captures everything that strategy involves.

Yu (2021) identifies more than 90 definitions of strategy in the literature, demonstrating the considerable diversity in how scholars and practitioners have understood the concept. Understanding strategy therefore requires consideration of the different questions and dimensions that these perspectives bring into focus.

Strategy Provides Direction

At its broadest level, strategy concerns how an organisation intends to achieve its objectives.

Grant (2008) identifies several elements commonly found across definitions of business strategy: the pursuit of particular goals, the allocation of resources, and consistency, integration and coherence among actions.

Strategy is therefore not simply a collection of activities. Organisations undertake many activities every day, but activity alone does not establish strategic direction. Strategy connects those activities to a larger purpose and helps determine where the organisation is going, what it will prioritise and how its resources will be deployed.

Strategy therefore involves both direction and choice.

Strategy Is More Than Planning

Strategy and planning are closely related, but they are not identical.

A plan may specify actions, responsibilities, timelines and resources. Strategy addresses more fundamental questions: What are we trying to achieve? Where will we compete or create value? What will distinguish us? What capabilities and resources will we require? What will we prioritise? What will we deliberately not do?

Plans help translate strategic choices into action. Without clear strategic choices, however, detailed planning can organise activity without establishing whether that activity is taking the organisation in the right direction.

Strategy Requires Choice

Porter (1996) places choice at the centre of competitive strategy. He argues that strategic positioning requires a distinctive and valuable position supported by a different configuration of activities.

Organisations operate with finite resources. They cannot serve every customer, pursue every opportunity, offer every product and optimise simultaneously for every possible source of competitive advantage. Strategy therefore requires decisions about where to focus and where not to focus.

Porter identifies variety-based, needs-based and access-based positioning as different ways in which organisations can establish strategic positions. Together, these illustrate an important principle: an organisation does not need to be everything to everybody.

Strategic positioning requires clarity about what value the organisation intends to create, for whom and through what distinctive combination of activities.

Strategy Requires Trade-Offs and Fit

Choosing a strategic position also means accepting that some choices are incompatible with others.

A business pursuing a highly customised premium service, for example, may require different people, systems, processes and cost structures from a business competing primarily through standardisation and low prices. Attempting to pursue contradictory positions simultaneously can weaken strategic coherence.

Trade-offs therefore require leaders to determine not only what the organisation will do, but also what it will not do.

Porter (1996) further argues that competitive advantage and sustainability depend on fit among an organisation's activities. Products or services, operating processes, people, technology, customer relationships, distribution arrangements and other activities should reinforce the strategic position rather than pull the organisation in different directions.

Strategy therefore involves more than identifying one distinctive feature. It requires coherence across the organisation.

Strategy Is Also Shaped Through Learning

Mintzberg adds another important dimension by challenging the assumption that strategy exists only as a deliberate plan formulated before action begins.

Strategy may be intentionally designed, but patterns can also emerge through decisions, experience and learning over time. This is particularly relevant in uncertain and changing environments, where implementation may reveal new information about customers, technology, regulation, competition or organisational capability.

Strategy therefore requires deliberate direction alongside the capability to learn and adapt as new knowledge becomes available.

Different Perspectives on Strategy

The multidimensional nature of strategy becomes clearer when some of the major contributions are considered together. Table 0.1 summarises four influential perspectives and the particular dimensions of strategy they bring into focus.

Table 0.1: Different Perspectives on Strategy

Source: Adapted from Yu (2021, p. 17).

As Table 0.1 demonstrates, these perspectives illuminate different dimensions of strategic thinking. Chandler draws attention to long-term direction and resources; Andrews to purpose, decisions, policies and plans; Porter to positioning, choice and distinctive activities; and Mintzberg to deliberate strategy as well as patterns that emerge through experience.

Considered together, they reinforce why strategy should not be reduced to a single dimension.

Strategy Creates Capability Requirements

Strategic choices have implications for what an organisation must be capable of doing.

An organisation choosing to enter a new market, digitise a service, specialise in a particular customer group or pursue a different value proposition must consider whether it has the knowledge, people, systems, resources and relationships required to execute that choice.

Analytical capability supports the interpretation of relevant information. Strategic capability supports informed choices. Leadership capability mobilises people and resources around those choices. Adaptive capability supports responsiveness as conditions change, while execution capability translates strategic choices into action and results.

Strategy therefore connects choice, capability and execution.

So, What Is Strategy?

The different perspectives do not need to produce one perfect definition. Instead, they reveal several characteristics that are central to understanding strategy.

Strategy concerns direction, choice, resource allocation, positioning and alignment. It requires organisations to determine where they intend to create value, what they will prioritise, what they will not pursue and how their resources and capabilities will support those choices. It also requires learning as circumstances evolve.

At Goshen Business and Career Advisory Services, our approach to strategic advisory recognises these interconnected dimensions. We support enterprises and institutions to establish clarity of direction, make deliberate strategic choices and align priorities, resources and capabilities with the direction being pursued.

Strategy can therefore be understood as the coherent set of choices through which an organisation determines where it is going, where and how it will create value, what it will prioritise, what it will not do, and how its resources and capabilities will be aligned to achieve its objectives.

This synthesis does not seek to replace established definitions of strategy. It brings together their key insights into a practical understanding that leaders can use to think more deliberately about the direction and development of their organisations.