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A.

BACKGROUND

1 Conceptual Requirement

The word STRATEGY has a multiplicity of meanings. Henry Mintzberg has identified five
common usage of the term strategy, which begins with P in his writing on strategic
management theory.

Plan - Strategy is a plan, which means deliberately and consciously chosen course of
action. This means people makes strategies in advance of the actions to which
they apply and they develop strategies consciously and purposefully.
Ploy - A strategy may be a ploy, in the sense of a particular maneuver designed to
mislead or distract a key player, such as a business competitor.
Pattern - The definitions of strategy as plan and pattern can be quite independent of one
another: Plans may go unrealized, while patterns may appear without a prior
formally documented set of decisions or plan. Plans are intended strategy,
whereas patterns are apparent in realized strategy.
Position - Mintzberg suggests that it may be considered as a position. Here he refers location
of an organization in its environment. This may be a geographic intention like
expanding internationally or the position of a business in a particular industry.
Perspective - Strategy may be a perspective in the sense of a persistent mindset regarding the
world in which the organization operates. The most influential members of the
organization share this mindset or perspective. This prevailing view is like an
organizational personality. This worldview shows in the intentions and/or the
actions of members, as individuals bound by common thinking and behaving.

In 1992, Harvard Universitys Professor Michael E Porter has defined strategy by separating it
from operational efficiency and effectiveness and placed it in terms of market positioning. Porter
emphasizes operational effectiveness (OE) means performing similar activities better, which
means in a more efficient, faster and cheaper way than competitor do. However, while OE is
necessary, it is not sufficient. Operational effectiveness by itself is not a strategy. It is just the
price of admission to game so to speak. An organization needs to establish a difference that it can
sustain. Strategy is about differentiating organization from competitor enterprises. Strategy is
about being different in the choice of a different mix of activities to provide a product or service.

Strategic positions can emerge from three distinct sources, which serve as a basis for positioning:
Variety-based positioning: A company can specialize in a subset of an industrys product.
Needs-based positioning: A company can try to serve more needs of a target group than
rivals.
Access-based positioning: A company can segment customers who are accessible in
different ways.