What is a Company Strategy?

Malcolm Tatum
Malcolm Tatum

Company strategy is a term that is used to describe the combination of policies, processes, and procedures that are employed to help a company operate according to its mission statement and achieve its short-term and long-term goals. An overall business strategy is multi-layered, since it involves the coordination of the operations of every department and division within the company structure. While involved, this type of strategic planning is necessary if the function of each component of the business is to complement all the other components.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

While there are many different concepts regarding what constitutes effective company strategy, most will focus on three key areas as the foundation for all methodologies that combine to make up the overall approach to running the business. The first of these three is the cost of operation. Since the idea of any company is to make a profit, it is essential to understand how much it will take to generate products that are ultimately sold to customers. By understanding all costs involved in this process, and learning how to manage those costs with the greatest degree of efficiency while still maintaining high quality, the company is in a better position to determine the minimum rate or price for the products needed to earn some type of profit. From there, retail prices can be determined by applying the basic laws of supply and demand, allowing the business to offer products that consumers desire at a price they are willing to pay.

Along with cost of operations, a sound company strategy also relies on the creation and implementation of a workable mission statement. The statement should be broad enough to allow the company room to set and adjust goals as needed, but narrow enough to provide the business with the ability to create and nurture an identity that consumers recognize and come to trust. In order for the mission statement to succeed, it must have some grounding in reality. Operating from that foundation of reality, it is then possible to envision a profitable future for the business and begin setting goals that will make it possible to fulfill the statement as those goals are achieved.

The final key element to a company strategy is known as differentiation. This is simply the process of creating an image in the minds of consumers that the company has something to offer that sets it apart from the competition. Within this section of the overall strategy, such functions as public relations, marketing, and sales efforts are organized in a manner that allows each process to harmonize with the efforts of the other two. The end result of this coordination is positive consumer perceptions that increase the chances of earning and maintaining customers.

There is no one perfect company strategy that works for every type of business. The essentials must be adapted to the circumstances surrounding the company and the market or markets where it will attempt to connect with consumers. For this reason, developing the strategy should be approached with the determination to consider all reasonable avenues of action and corporate structure, realistically project the outcome of implementing those actions, and decide if they are ultimately in the best interests of the business.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments


@SarahGen-- I agree with you. It's easier for a company to change its mission statement than to change its strategies though. Almost always, the issue is a too narrow mission statement. So making it larger and more encompassing will probably solve the problem.

I think the most important aspect of a company strategy is that it should have foresight. The company must have an idea of where it ones to be after a decade or two decades and the strategies must be effective enough to get the company there.


@fify-- That's bad. The strategies of a company must be in line with its mission statement. If they're different, either the strategies need to change or the mission statement.

Discrepancies between mission and strategies may occur. However, this is why companies have strategic management and performance management departments. The job of these departments is to make sure that all activities are in line with the company's mission.

If employees of a company have not understood the mission or if their strategies are not getting the company closer to the mission, then staff performance is in serious need of oversight. Goal oriented performance measures can help employees get back on track.

Regardless, there is just no excuse for a company's strategy to not be matching its mission.


Sometimes I run across companies or organizations that claim one thing in their mission statement, but they do something else. Their mission and goals do not match with their strategy or activities. It's difficult to know this until one works with the company for some time and gets to know the company more.

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