The importance of strategy

“Mission is at the heart of what you do as a team. Goals are merely steps to its achievement”. e.g., (Dixon P. 2012).

“The expert in battle seeks his victory from strategic advantage and does not demand it from his men.”  e.g., (Tzu S. 2009).

A company is made up of people, assets and financial resources. It is a collection of skills and resources. Combining these items and focusing them toward a shared objective is the main strategy goal for the company. The importance of combining skills and resources was well highlighted by Porter in his “value chain” concept from business management.

A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level. Products pass through all activities of the chain in a set order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of the independent activities’ values.Porter1

The value-chain concept has been extended beyond individual firms. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will activate different economic factors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the “value system”. A value system includes the value chains of a firm’s supplier (and their suppliers all the way back to the basic raw materials of the product), the firm itself, the firm distribution channels, and the firm’s buyers.

Author: Carlo Olmi

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