StrategyLesson 1 of 5

What is strategy?

Taught in English

Questo esame si sostiene in inglese: le lezioni e le domande sono in inglese. L'interfaccia resta in italiano.

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Part 1 of 3

What Strategy Is

Strategy is the set of choices that determines a firm's long-run direction — what it will do, what it will not do, and how it intends to create value in a competitive environment.

Strategy is distinct from tactics (short-run operational decisions) and from goals (desired outcomes). Strategy is the *means* by which a firm pursues its goals. "Grow revenue by 20%" is a goal; "expand into the German market by acquiring a regional distributor" is strategy.

Three levels of strategy within a firm: - Corporate strategy: which industries or markets to compete in. "Should we diversify?" "Should we acquire Company X?" "Should we exit this business unit?" - Business strategy: how to compete and win *within* a chosen industry. This is where competitive advantage lives. - Functional strategy: how marketing, operations, HR, and finance each support and align with the business strategy.

Most exam questions on strategy focus on the business level — industry analysis, competitive advantage, resources.

Worked example

Alphabet (Google's parent) operates at three levels simultaneously. Corporate strategy: compete in search, cloud computing, autonomous vehicles, healthcare — a diversified portfolio of bets. Business strategy within search: use network effects and data advantages to maintain dominance. Functional strategy: hire top AI researchers, invest in data infrastructure. Each level cascades from the one above.

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Why is this the correct answer?

Eliminate any option that contradicts something stated directly in the lesson, then check which one actually follows from the rule you just learned. Tell me which option confused you and I'll point to the exact line.

Exam strategy

Porter's Five Forces analyses the industry; generic strategies (cost leadership, differentiation) sit at the firm level. Don't mix them.