It is useful to draw the distinction between strategies and tactics at this stage. Strategy is a comprehensive plan designed to ensure that the basic objectives of an enterprise are achieved. It includes determination of a specific course of action that is capable of meeting competition as well as fulfilling an enterprise’s objectives. It is action based and more specific than objectives.
To achieve clarity, managers now a days talk about four types of strategies:
1) Master or grand strategies that cover the entire pattern of an organization’s objectives, policies and specific resources deployment. Grand strategies are derived from a careful situational analysis of the organization and its environment.
2) Program strategies are more specific and are concerned with the deployment of resources to achieve basic organizational objectives.
3) Sub-strategies are more detailed than program strategies and focus on the attainment of specific objectives.
4) Tactics are the action plans of specific step by step methods by which strategies are executed. Tactics convert the philosophy of management into practice and force the enterprise to go down to the nuts and bolts of its operation. Tactics are formulated at the supervisory level and their primary focus is on implementing policy decisions taken at the top level. They are short term in nature and mainly concentrate on people and their actions.
The difference between strategies and tactics are outlined below:
1) Developed by management these decisions are never delegated below a certain level in management hierarchy
2) Generally the focus is on long term
3) The uncertainty level is quite high, lots of information to be obtained fro diverse sources.
4) Affect various parts of an organization in a significant way.
1) Employment and related to lower levels of management.
2) The focus is short term
3) Decisions are more certain and are taken within the framework of strategies.
4) The reach is limited to only specific segments of an organization.
These differences should not always be taken seriously are nothing but sub-strategies developed at a lower level. The following pyramid draws the curtain between the various types of strategies discussed above (Steiner and Miner).
Various types of Strategies
Master strategies >> Program Strategies >> Sub strategies >> tactics
1) Top level activity includes formulation of organization purposes and long term objectives.
2) Concerned with how basic organizational objectives will be achieved.
3) Detailed steps to implement program strategies
4) Short range step by step methods to be followed.
The difference between master strategies and programs or sub-strategies are fundamental, whereas the differences between program strategies and sub-strategies are merely a matter of degree. Strategies and tactics provide a general framework for guiding executive thinking and action. They are pragmatic plans of action designed to face turbulent environments and cut throat competition. In order to devise appropriate strategies and tactics a manager should (1) look outside the organization for threats and opportunities, (2) look inside the organization for weaknesses and strengths and (3) take a long term view of the corporate environment. For example, daring the oil shortage of 1979, many plastic firms could not obtain sufficient petroleum to maintain their operations. Some firms responded by modifying their strategies and diversifying to produce products that did not have a petroleum base. As environmental needs change, the strategies and tactics of a firms that desires to survive and prosper must also change.
In tune with Nirma:
With an annual capacity of 6.5 lakh tons of detergent Nirma Chemicals is the world’s largest detergent manufacturer. Nirma survived the onslaught from Hindustan Lever’s Surf on the strength of its low priced (Rs 10.50 per per kg against Surf’s price of Rs 52 per kg) brand NIRMA (launched in 1969). In 1992-93 after a gap of over two decades NIRMA entered the toilet soaps market with a slew of products ranging form a Rs 5.59 , 100 gm bar to a Rs 10, 100 gm bar and has since captured over 20% of the soap market (by volume) in the face of steep competition form HLL. With sales of nearly Rs 2,000 crore in 2002 NIRMA, has defined the markets in both soaps (15 – 16% growth rate against market growth of 3-4% per annum) and detergents (7-8% against industry ‘s 5%)