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This unit focuses on strategy, in particular the strategy of the companies behind well-known brands like Nike and Harley-Davidson. (Strategy can refer to specific strategies, such as the company’s marketing or distribution strategy; here we are talking about overall corporate strategy.) First an organisation needs to define its mission (normally through a mission statement); what is the organisation’s core business? Then it needs to define its strategy, ie plan how to succeed in this core business (and maybe decide whether its definition of its core business needs modifying). Organisations that lack a clear strategic direction tend to fail. Emerging industries can be extremely attractive to companies, as firms can get a foothold in the industry before others are established and barriers to entry become high. (Think of e-commerce, for example: within three years of start-up, Amazon came to dominate bookselling on the Internet.) Generally, however, companies can only succeed in an established industry by defining and implementing a corporate strategy that distinguishes them from competitors. Organisations need to be proactive, continually reassessing their own performance and the industry and environment they operate in. A number of standard tools can be used to aid this process of analysis, eg a SWOT analysis and PEST analysis. Yet although the setting of strategic objectives is fundamental to strategic planning, it is equally important to plan how these objectives are to be met; without effective allocation and use of resources, no strategy can succeed.

Strategy is a plan of action to enable a firm to compete. Developing a successful strategy is a vital part of the planning process forall business organisations. Analysing where a business stands in relation to its markets and competition enables it to identify potential opportunities for growth and potential threats. lt is then possible to set strategic objectives and to predict the human and financial resources needed to achieve them.