DEFINITION: A “strategy” is a general plan laying out a sequence of steps aimed at achieving an overall goal.
The term “strategy” is best understood in contrast to the term “tactics,” which are the specific actions required to realize the individual steps of the strategy.
ETYMOLOGY: The word “strategy” derives from the Greek word stratēgos, meaning “general,” which itself derives from the words stratos, meaning “an army encampment,” and agō, meaning “to lead.”
USAGE: As indicated by its etymology, the primary original context of the term “strategy” was military. Essentially, strategy is the practice of generalship.
However, warfare and soldiering have long been a rich source of metaphors that have been exported to many other fields of other human endeavor.
One of the most notable of these is the science of economics.
In economics, the notion of “strategy” has been applied in a variety of ways.
First, strategy is well-nigh ubiquitous in the economy due to the fact that all business firms exist to achieve some purpose. Therefore, firms must have a strategy, understood as a general plan for attaining their goals.
For example, if a company’s goal is to sell as many widgets as possible, it will need a strategy to set out its general vision of what specific steps it must take to achieve its general or overall goal.
Thinking about a company’s goals in such terms is sometimes referred to as “strategic management.”
The word “strategy” is often used in more limited contexts, as well.
For example, the term is widely used in the field of marketing, which is the attempt to maximize the number of consumers aware of a company’s products and to optimize the efficacy of the messages used to influence those customers.
These ambitious goals lend themselves naturally to strategic planning, which is often called “marketing strategy.”
It is interesting to note that the word “strategy” is sometimes replaced by a near-synonym, “policy.”
For example, the phrase “economic policy” refers to the general strategy employed by a government to achieve its broad economic goals.
Similarly, government strategies with respect to a particular sector of the economy may also be termed “policies.”
For example, a government’s strategy for extending financial subsidies or protection from foreign competition to the firms in a particular industrial sector is often called an “industrial policy.”