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0:00
Hello and welcome
to this series of
introductory talks on
business strategy.
My name is Robert Grant.
I'm a professor of
strategic management at
Bocconi University
in Milan, Italy.
I'm also the author of
Contemporary Strategy Analysis,
a leading strategic
management textbook used in
business programs throughout
the world. What is strategy?
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The origins of business strategy
lie in military strategy.
Indeed, the word strategy is
derived from the Greek
word 'Strategia',
meaning the art of the general.
However, the history of
military strategy extends
even further back.
The Art of War by Sun Tzu,
written in about 400 BC,
is considered the first
treatise on strategy.
During the modern era,
the concept of strategy
is extended beyond
military conflict to
almost all fields
in which competition
takes place,
especially business,
politics, and sports.
Thus, we can define strategy
as any plan of action
or policy designed to achieve
a major or overall aim.
Let's look more closely
at business strategy.
What does it mean for
a business enterprise
to have a strategy?
The answer to that question has
changed over the past 60 years.
If we go back to the
1960s or 1970s and ask
the CEO of a large corporation
what the company's strategy was,
we will probably be
directed to the company's
corporate plan.
A document, which
on the basis of
forecasts of market growth
and other economic variables,
outlined projections of
capital investment,
capacity additions,
human resource plans, new
business developments, and
programs of R&D, over a
period of five years or more.
Now, that type of
detailed corporate
planning fell victim to
the increased volatility and
unpredictability of the economy
where we can't
forecast the future.
We can't make detailed plans
for what we are going to do.
Where does this leave
business strategy?
Even if we cannot
predict the future
and hence cannot
make detailed plans,
every business needs
an overall purpose.
It needs an understanding
of how it will compete,
it needs a direction
for its development.
This is what the strategy
of a business comprises.
It is a statement of
what the business is
about and its aspirations
for the future.
