MART 434: Competitive Strategy

What is Strategy?

Tabi Polson 8128947

Introduction

Strategy is a very difficult concept to comprehend and define, the word is often miss-used
and many company executives cannot properly explain what it means, even though they may
use the word frequently (Bauman, 2004). I will attempt to shed some light on this mysterious
term by first exploring the concept of strategy in a broad sense using different contexts;
business/managerial and military. The different meanings behind the terms strategy and
strategic, and why the two, in my opinion, are often mixed up. Finally the managerial
implications; what the conception of strategy presents, in terms of managerial concepts and
the behaviour of a firms employees.

What is strategy?

To be strategic (adjective), to me, is to be clever, in that you utilize the resources made
available to you. These resources can be anything; money, knowledge, luck, or even
personality, as long as they are used to achieve an objective in a cunning way. Strategy
however (noun) is much harder to define without a context. There is strategy in the
political/warfare sense, strategy in the game sense and of cause strategy in the
managerial/business sense. I would suggest the two versions of the word mean two different
things. The word strategy’s roots are of military origin meaning, ‘general’, or the ‘art of a
general’ (Dictionary.com 2010, Gocatgo.com 2010, & Bracker 1980). The word has many
military connotations (defeating ones enemy for example) in its definitions, even when
referring to a managerial/business context. However to be strategic, fits into most everyday
contexts; shopping, cleaning, writing essays ect. Strategy can only be properly defined when
placed into a specific context, as the meaning of the word changes significantly depending on
the perspective it is being discussed in. In my opinion, military strategy is much simpler to
define, as most academics agree on the topic; “The science and art of military command”
when applied to the “planning and conduct of large-scale combat operations” (Gocatgo.com
2010 & Gray, 1999). But when this is translated into a managerial sense, defining strategy
becomes much harder; “business academics and consultants have been writing about strategy
for over 40 years; yet there is still great confusion as to what strategy is” (Khalifa, 2008.
Pp896).

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What is known and/or agreed upon by academics

“Most of the literature remains theoretical without being empirical” (Mintzberg, 1978.
pp934) this statement still holds true some 30 years later. It can be seen in the fact that most
articles and journals on the topic of strategy start by explaining that there isn’t one general
definition on strategy, that countless academics have tried, but no one can agree (Porter,
1996, Collis & Rukstad, 2008, Bauman, 2004 & Singer, 2008). One of the reasons for this
could be that “the noun and the adjective, ‘strategy’ and ‘strategic’, are purloined by the
unscrupulous or misapplied by those who are careless or ignorant” (Gray, 1999. pp16). Or as
I see it, most people who describe strategy are actually thinking of being strategic. To be
strategic is to be clever, and strategy is perceived as being about conducting oneself cleverly
(Chaffee, 1985). I am going to suggest otherwise, one doesn’t need a strategy to be strategic,
to explain this I will use the case example of a web based company which creates
machinima1, called Rooster Teeth productions.

Six or so years ago a small group of gamers in Texas created a short video using the
videogame engine Halo. This was the first episode of a series called Red vs. Blue, which now
has 5 sessions and several spin off miniseries. This production group acted, in my opinion,
strategically in that they built up a fan base and popularity to a point where Microsoft
(distributers of the game Halo) took notice. This strategic behaviour caused popularity of the
series to grow extremely quickly; the community now has 70,000+ members (Red vs.
Blue.com 2010). The group continued to be strategic as they accepted contracts with
Microsoft and began creating other machinima series; Strangerhood using The Sims2,
P.A.N.I.C using F.E.A.R, several one off episodes using Quake, ect. Rooster Teeth didn’t
have a strategy, but they were strategic in that they took opportunities as they were presented
and cunningly moved forward. What started as a small project with some friends on the
weekends is now their very well paid day job. By strategically listening to the fan base they
have added new features to the site to keep themselves and it interesting, Achievement
hunter2 for one, is now almost as big a part of the site as the Red vs. Blue and machinima
component.

To have a strategy is to have an enemy, whereas to be strategic is to act in a cunning manner

alongside others, not necessarily in direct completion with them. Therefore, in business, we
1
Machinima is a user generated product which involves making short videos using 3D videogame engines. See
http://www.machinima.com/ for further detail.
2
Achievement hunter is a facility for X-Box users to share information about obtaining gamer achievements, or
gamer points, from hundreds of X-Box games. See http://redvsblue.com/archive/?sid=ah for further detail

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should be moving towards acting strategically, because what is being referred to as strategy is
really just having a plan. “If asked, most practising executives would define strategy as ‘how
I could achieve my company’s objectives’. Although this definition is technically correct, it is
so general that it is practically meaningless” (Bauman, 2004. pp5). By this definition ‘how I
could achieve my company’s objectives’ strategy is simply making a plan, therefore I agree
with Bauman (2004) in that it’s meaningless. Why call something strategy when it’s a plan,
plain and simple, a plan is something which is stationary and isn’t able to adapt to situations
(that would be making a new plan).

Strategy is much more than just a plan

“Strategy is choosing to perform activities differently than rivals do” (Porter, 1996. pp64).
This idea is agreed upon by many academics (Collis & Rukstad, 2008, Bracker, 1980, Singer,
2008 & Bauman, 2004) but these same academics voice that it is more a plan which is
conducted differently from ones competition. Bauman (2004) gives an interesting point that
“all successful strategies share the same underlying principles or building blocks” (Bauman,
2004. pp6). This suggests that strategy is a formula, which if followed, can ensure success.
Chaffee (1985) and countless others give explanations of how different strategy formulas
work, it’s then more a matter of picking the right one and running with it. I would disagree
with this, and backing me up is Godin (2005) with his purple cow concept, which says that
it’s more important to listen to the customers and create something awesome and new, than
follow a set plan. Focusing on being different, rather than spending large amounts of time on
planning and trying to copying what others have done successfully, in that one’s responses to
unexpected situations is what matters, rather than following a set plan which doesn’t account
for changes.

This of cause applies back to Rooster Teeth productions, the group have kept themselves
interesting, not by following a plan, but by listening to their fans and customers and acting on
what they hear. This could be considered a strategy though, to listen and do what seems best
at the time, but is it a plan if it’s really just making it up as you go along? From this I would
suggest that strategy is not a fancy way of saying plan but a quicker way of saying way of
behaving.

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Strategy is to strategic as clever is to cunning

So does being strategic mean one has a strategy? From the above analysis I’m going to have
to say yes, even if you’re not aware of it; if one is strategic, one has a strategy. And therein
lies to problem faced by businesses; is the strategic behaviour of the firm in sync with the
strategy of the company. Within the business context, there are hordes of components,
theories and concepts regarding strategy (Chaffee, 1985).

Bauman (2004) talks about strategic positioning; how a firm “will be successful if it chooses
a distinctive (that is, different from competitors) strategic position” (Bauman, 2004. pp7).
This is similar to how Porter (1996) describes it as; “performing different activities from
rivals' or performing similar activities in different ways” (Porter, 1996. pp62). Godin (2005)
agrees with these definitions with his concept of ‘being remarkable’ to differentiate from
ones competitors. So in other words, strategic positioning is being different from ones
competitors in a way which cleverly gets the customer to interact with your firm more or
instead of with other firms. Bauman (2004) talks about the development of this strategic
positioning as creating strategic ideas; “[strategic ideas] may emerge through trial and error
or because somebody has a “gut feeling” or because somebody “got lucky” and stumbled
across a good idea.” (Bauman, 2004. pp7)

Porter’s (1996) definition of strategic positioning (above) and competitive strategy are very
similar; “Competitive strategy is about being different. It means deliberately choosing a
different set of activities to deliver a unique mix of value” (Porter, 1996. pp64). The
difference in the two activities, as I see it, is that one is part of the planning process and the
other is during the implementation process. However other authors such as Godin (2005) and
Collis & Rukstad (2008) would argue that the two should be the same, in that the ‘plan’
should be continually adapting and changing to suite the changing environment it is being
implemented in.

Collis & Rukstad (2008) give, in my opinion, a wonderful analogy on what a firm’s strategic
plan should do:

“Think of a major business as a mound of 10,000 iron filings, each one

representing an employee. If you scoop up that many filings and drop them onto a
piece of paper, they’ll be pointing in every direction. It will be a big mess: 10,000
smart people working hard and making what they think are the right decisions for
the company – but with the net result of confusion. Engineers in the R&D

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 department are creating a product with “must have” features for which (as the
marketing group could have told them) customers will not pay; the sales force is
selling customers on quick turnaround times and customized offerings even
though the manufacturing group has just invested in equipment designed for long
production runs; and so on. If you pass a magnet over those filings, what
happens? They line up. Similarly, a well-understood statement of strategy aligns
behaviour within the business. It allows everyone in the organization to make
individual choices that reinforce one another, rendering those 10,000 employees
exponentially more effective.” (Collis & Rukstad, 2008. pp84)

This analogy, to me, explains the whole point of developing and creating a firms strategy, to
get everyone in the firm acting strategically in tune to the firms competitive strategy.

Conclusion

Strategy is about planning to act in a clever way when facing the unknown; it is a way of
behaving and thinking, not just about planning. Though I initially thought there was a
behavioural difference between the words strategy and strategic, I now believe that one is the
act and the other is the way in which that act is undertaken (the ‘what’ and the ‘how’).
Because though the review of the production company Rooster Teeth and several academics’
works from different managerial back grounds, I have seen this understanding of the term
emerge. And as I concluded earlier, strategy is a way of behaving, not just a detailed plan in a
report. One of the main problems recognised by the above academics is that companies often
don’t make their strategy clear and as a result those working in the company, who may still
be acting strategically, are not acting strategically in tune to the company’s overall strategy.
The ambiguity of the meaning of strategy holds back the definition of its managerial
components, as it is often just a word which managers throw in without understanding
exactly what they mean by using it. This lack of understanding then spreads to those though
out the firm to the point where, though the company strategy maybe good, it’s useless
because no one in the firm is behaving in accordance with it. Strategy is being clever,
utilizing ones resources and adapting to environmental changes faster or more efficiently than
others competing with you. It is also about understanding, of the environment, the customers,
the competitors, and the firm/collective which you are operating in.

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Reference list

2 Speed.com (2006) Applying Military Strategy and Tactics to Business, available:

http://www.2-speed.com/2006/09/applying-military-strategy-and-tactics-to-business-
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Bauman, R. (2004) What is strategy and how do you know if you have one, Business
Strategy Review. Vol. 15, No. 2

Bracker, J. (1980), The Historical Development of the Strategic Management Concept,

Academy of Management Review. Vol. 5, No. 2, pp.219-224.

Chaffee, E. E. (1985), Three models of strategy. The Academy of management review, 10(1),
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Collis, J. & Rukstad, M. (2008). Can You Say What Your Strategy Is, Harvard Business
Review. Vol. 86 Issue 4, pp82-90.

Dictionary.com: an ask.com service (2010) Definitions of strategy, available:

http://dictionary.reference.com/browse/strategy [accessed 25/03/10]

Gray, C. Modern Strategy, (1999) Oxford University Press: Oxford.

Gocatgo.com (2010) A definition of strategy, available:

http://www.gocatgo.com/texts/strat.tactics.doctrine.html [accessed 25/03/10]

Khalifa, A. (2008) The “strategy frame” and the four Es of strategy drivers, Management
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Mintzberg, H. (1978) Patterns in Strategy Formation, Management Science. Vol. 24, No. 9.

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Porter, M. (1996). What is Strategy, Harvard Business Review. Vol. 74 No. 6.

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Singer, J. (2008) What Strategy Is Not, MIT Sloan Management Review. Vol.49 No. 2.

Godin, S. Purple Cow: transfer your business by being remarkable, (2005) Penguin Books:
London.