Strategy Vs Tactics: How Obsession on Either Ends is Unhealthy
If you own a business, then you will definitely have come across the terms, ‘strategy’ and ‘tactic’. Many people think that both are one and the same, thereby only focusing on one of them. This is a bad move as far as your business is concerned.
Both strategy and tactics are different, and unnecessarily obsessing over one of them while rejecting the other completely is not good for your business. In this article, we take a look at the differences between the two terms, while also explaining why you must make use of both of them in your business.
The Differences Between Strategy And Tactics
Both strategy and tactics differ from each other in the following five ways.
1. Goals: While the end goal of a strategy is to create an overall plan for a business to move forward, tactics are more focused on achieving a specific target in the overall plan. For example, a strategy for a business might state that it sees capturing a 25% market share within 5 years.
Meanwhile, a tactic can be focused on the specific method that is used to attract senior citizens to the products offered by the business. And many such tactics will be used to achieve the target of 25% market share.
2. Responsibility: A strategy is responsible for the state of the entire business, while a tactic is only responsible for a specific aspect of the business.
3. Member Participation: A strategy is usually planned with the involvement of all the important people in an organization. This includes the CEO, sales head, marketing strategist, and so on. Meanwhile, tactics are designed by middle level and lower level employees like sales supervisors, branch managers, and so on.
4. Time: A strategy is a long term outlook for the business, while a tactic is a short term method. As such, while the strategy mostly remains the same despite market conditions, the tactic can keep changing to adapt such situations.
For example, the strategy of a business might state that it needs to expand to three more neighboring states over the next 3 years. Now, if the market condition is bad, then expansion is unlikely at the moment. But it does not alter the fact that the strategy for the next 3 years remains the same.
What will change though is the tactic. While the business might have focused on investing a lot of money in advertising when the market was positive, it will cut back on such expenses when the market dampens, waiting for the situation to change so as to restart the ad campaign.
5. Resource Allocation: Every single resource of an organization is allocated in order to ensure that the business achieves the goal as outlined by its strategy. In contrast, only specific resources are allowed to be used to achieve the goal of a tactic.
Why You Need To Use Both Strategy And Tactics
Many people fail to see that both strategy and tactic are interrelated. This is an unhealthy attitude that will only harm a business. Both strategy and tactic have to be used synergistically to achieve your business goals.
If you have developed a strategy for your business, but do not focus on the tactics, then you will simply be left with a large business goal, and no concrete plans to realize that goal. Similarly, if you have come up with a large number of tactics to achieve small goals, your business will likely operate in a chaotic way because there is no overall, big goal that you are aiming for.
Below, we will look at two cases to further illustrate this point and to show you how crucial it is to use both strategy and tactics together, rather than focusing on just one of them.
~ Case #1 - Strategy Without Good Tactics
Imagine that your business sells soaps and you wish to diversify into perfumes. So, you will set your overall strategy for the next 5 years, detailing where you will set up the production unit, from whom you will source the raw materials, how the final product will be, how you will distribute it and so on.
Now, for this plan to work, you will need to carefully develop tactics that can make each part of the strategy a success. For example, when it comes to distribution, you may have developed a strategy to use your existing distributing network. But what if the distributors are not interested in selling your perfume? Your business will fall flat there.
Therefore, you will have to develop a tactic to entice distributors to sell your product. This can be done by offering them higher commissions, better bonuses, etc. And by applying such a tactic, you will ensure that the strategy of distributing the perfume through the existing network is achieved. Without using such good tactics, your strategy will only remain a grand plan on a piece of paper.
~ Case #2 - Tactics Without Good Strategy
Imagine that your business is facing stiff competition from a rival brand. So, to compete against them, you come up with a tactic to lower the price of the product and advertise heavily. As a result, your sales increases and you become a market leader. So far, so good. But what next?
Remember that you are now is a position of strength. People have good opinions about your product and like the fact that they come cheap. As such, why don’t you try to expand your market into other territories? The reason you didn’t think about it is that you have no long term strategy for your business.
If you had, then you would have aggressively marketed your product into other territories as soon as you became a market leader in the current territory. And this is why strategy is important. It gives you a larger goal to strive towards.
Without a good strategy, you will only be developing tactic upon tactics to survive a market condition rather than use it as an opportunity to drive growth.
And given the close, intertwined relationship between strategy and tactics as explained above, it should be clear to you as to why you have to cater to both these components when planning the future of your business. Neglect any one, and your business will never run on it full potential.