Key Differences between Business Strategy and Tactics

Most of you know the differences between business strategy and business tactics. But when you are asked to state the differences you generally fumble for suitable words and phrases. Maybe phrases such as “long and short term” and “high and low stuff” are often muttered. But not much is followed thereafter. In this blog I elaborate key differences between business strategy and business tactics for your benefit.

Business Strategy

1. Business strategy is defined as “a well thought out long term plan incorporating chosen methods, moves or a series of maneuverers chalked out by senior managers for obtaining a set of specific objectives of a business”. This definition characterises strategy as long-term, multi-dimensional, complex, and high-flown and having huge impact on business performance

2. Analysts consider strategy as the thinking part of the business process driven by the vision of the stakeholders

3. Although static in nature, strategy gives direction and sense of purpose in movement towards achieving business objectives

4. Value optimization is the anchor on which strategy is fastened; by this, business seeks best possible benefits in a sustainable manner and over a long-term span

5. Integration is the means whereby strategy connects various competing and complementary elements within a business. Like an alchemist, corporate management tries to drive the best mix, blend or configuration of resources and capabilities of business. In sum, strategy fuses many parts together to form a meaningful whole with a view to achieve set goals. For example, a business that has trained human resource and has identified a niche market could use a perfect configuration to get optimum results from an opportunity

6. As I said earlier strategy is for long –term and by nature static. This theme can be further laboured to see a nuance in terms of how a business responds to changes. You cannot easily adjust strategy to changes that are taking place in the market on a day-to-day basis. Nether strategy allows you to re-act to each change in a short time. Factoring market movements, alteration in consumer preferences and shift of business cycle into strategy takes quite some time. This part is better left to be handled by tactics as explained below.

Business Tactics

1. Business tactics are defined as ”specific moves, manoeuvres and actions taken in isolation or as in a series by line managers in order to move from one milepost to another in the pursuit of operationalizing strategy”. By this definition it is clear that tactics are short-term, linear, and single, with localised focus and having fairly limited impact on business performance

2. It is the action part of the business plan process and driven by mission related to a particular set of circumstances

3. Tactics are in a state of constant of flux keeping in line with changes taking place in the environment; these symbolise movement towards goals and mileposts within business objectives

4. Value maximization is the anchor on which tactics are knotted, by this, business seeks best possible benefits in the short-term, and so that trend curve of business success never falters

5. Decomposition is the means whereby tactics dissect a single part from the whole strategy that needs correction or adjustment. In other words, tactics allow you to excise a part from the whole plan, work on it and re-fix without upsetting the overall gist of the strategy. An apt example is the pricing policy adopted in a business. When an existing old customer comes with a special order for a large quantity of a popular product tactics allow you to consider a special discount in addition to the usual ones.

6. Tactics are by nature short-term affairs that function in consonance with all-inclusive strategic policy, but tweak it each time a business faces an issue or snag. Nobody can keep a treasure trove of tactics that could be applied to, each time an unforeseen consequence slaps on the face of business. Each time you face a crisis situation you come out with a tactic that takes care of it adequately. Admittedly, tactics are developed on the spur of the moment. It does not mean planning tactics is not necessary in a business though. If you envisage how a situation could unfold, you can develop the wherewithal to meet it. What is in essence is that you have to quickly adjust to changing business environment and the consequences that arise in its wake? For this purpose a line manager who has an uncanny ability to use a blend of planned and ad-hoc measures with a view to tide over a difficult and perhaps desperate situation is an excellent tactician.

Muthu Ashraff

Business Adviser

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