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Distinguish strategy and strategic management in business activities of some
organizations/companies.

Background
There is a story about an athlete who fails to evaluate his ability. He does not know
what competition to participate, what goal to achieve. Despite his ability of running
within 5,000m, he still participates in a 10,000 m competition. Consequently, he invests
all of his energy to the first 5,000m and then cannot finish the rest of the competition.
The failure of such athlete shows us that no strategy, tactics in the competition will lead
to failure.
So do any organizations or companies. They should know what they are doing,
their ability, objectives, what to do and how to do to reach their targets in the shortest
time with least energy and other resources. It is proven that no appropriate strategy shall
lead to a weak, underdeveloped organization, or even lead to bankruptcy. So what is the
strategy? To fix such problem, organizations and companies should build suitable
strategies and well manage such strategies.
I. Definition of strategy
1. Concepts and definitions of strategy
- According to General Ailleret, strategy means “determination of ways and means
used to reach targets through policies”.
- G. Hissh defined “Strategy is the art of combining actions and control them in
order to reach long-term targets”.
- Or McKinsey (1978) stated that "Strategy is a group of chains of activities
designed to generate sustainable competitive advantages”.

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There have been many definitions of strategy. But it is summarized as the following:
- Strategy is a logical process from conception to thinking and and setting of
action plan.

- Strategy is the result from available information and strategic viewpoint in
order to direct and plan long-term targets and build action plan.
- Strategy is a group of chains of activities designed to generate sustainable
competitive advantages.
- Strategy is a procedure that gives answer to the following questions: “Where
are we? What are our targets? Where and how will we go?”
- Strategy is a combination between environmental values and resources of
organizations in which strategy setting should be suitable with context, organization and
generate new values.
2. Definitions of strategy by companies:
As Alain Charlec Martinet defined “Strategy of any companies aims to outline
quite stable and sustainable orbits of development, around which decisions and accurate
actions of companies can be arranged.”
Strategy is a system of viewpoints, objectives, basic targets, solutions, policies
designed in order to make best use of resources, advantages and opportunities of
companies to reach set targets in a certain period of time.
In operation environment of companies, including markets and competitors,
strategy helps draw a way of consistent response to companies. Strategy represents a
selection, target of companies that is usually called strategic positioning by experts.
In markets or market segments in which Companies will run and business tactics
applied, how can Companies take more advantages than their competitors with specific
customers?
What sources should be used (human, skill, asset, finance, knowhow etc.) to get
such targets?

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What are external potential threats that can affect the implementation of strategy:
environment, competition, politics, natural resources, etc and plan for response to risks?

- Under a common approach, it can be stated that strategy is a system of long-term
targets, policies and solutions mainly in production and business, in settlement of
factors such as human, finance, etc. in order to develop companies.
3. Contents of strategy:
A proper and complete strategy should include the following contents:
- Strategic vision: It is the image of companies, organizations in future – how will they
be in future? Strategy makers should have a vision and combine lessons learnt from the
past with current knowledge and predict future with sense, creation and opportunities.
- Strategic mission: It is what companies should do including internal and
external affairs and relations with authorities.
- Target of such strategy is the result in future, strategies to gets targets and action
plans.
- Suitable organizational structure and management policies in which strategic target is
very essential to concentrate and direct strategies.
- It is the determination of demands and resource distribution.
- It is to concentrate and mobilize all resources, to make better cooperation among
sections, working teams and create high agreement in actions.
- It is to check, evaluate, adjust and motivate timely.
- It is required to analyze impacts of environment and strategy, including general
environment, specific environment while recognize and predict opportunities and
challenges.
- Strategy is established on the basis of analyzing impacts between environment
and strategy. General environment evenly affect all industries including culture,

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technology, economy, law, demography, nature and globalization. It is called general
environment. The PEST(++) model is used to research general environment. The
PEST(++) model includes the following factors:

- Economic factor: inflation rate, interest rate, deficit or surplus of state budget,
trading, etc. Then we analyze GDP trend, interest rate, inflation, unemployment and
economic resources.
- Political factor: Political policies, political stability, laws, directions, policies. If
our industry is under direction, then we will receive support from the laws.
- Social factor: population, population characteristics, demography, national income,
lifestyle, people’s education, culture, etc.
- Technological factor: scientific studies, speed of technology transfer,
technological development, new equipment and

State investment in technological

research and development.
+ Natural environment: Natural characteristics of regions, climate, weather,
terrain, natural disasters, etc.
+ Globalization: Significant political events, major markets of globalization.
* Industry environment: life cycle of the industry

- life cycle of products:

Analyzing life cycle of products, we will discover the following cycles in a product:
- New emerge: At this stage, companies do not have their trademarks, customers,
markets and low income and they often suffer from loss.
- Development: At this stage, products are accepted in markets, leading to
increase of demand, high price and increase of profit. Many companies raise their
investment at this stage to grow profits. Competitors appear as profit grows. Therefore,
big companies should increase investment in their products.

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- Saturation: At this stage, supply is equal to demand. Price becomes the most
concern of customers. As a result, the weapon for competition is price. To get
advantages, it requires controlling costs and exploiting new markets.
- Decrease: Demand decreases at this stage. Companies lower their price to
compensate losses. Investors withdraw from the industry. Consequently, companies
should consider to withdraw or to improve their products to make differences.
Researching fluctuations in cycles of products and of the industry, we see that
life cycle is becoming shorter and shorter and generating more sub-industries. Some
industries overlap in a product or products. Speed of diversification in the industry is
very fast, which requires appropriate strategies.
- Market forces: In analysis of competitive environment, besides research of life cycle
of products, environmental forces should be researched. It is necessary to analyze power
of customers, power of suppliers and threats from competitors, threats from new
competitors, and threats from alternative products, opportunities and challenges,
prospect of the industry, evaluation of the industry, comparison of competitive
advantages.
* Internal analysis of companies: In Internal analysis of companies, it is necessary to
analyze resources (visible , invisible) , abilities , capacities , competitive advantages and
strategic competition.
II- Strategic management
1. Definitions, concepts of strategic management
- Strategic management is the process of determining strategic targets of organizations,
making policies, plans to get such targets and allocate resources for implementation of
such policies and plans.
- Strategic management is a set of strategic decisions and actions to determine
long-term result.
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- Strategic management is science and art in strategy in order to build directions
and targets for actions, implement short-term and long-term plans based on available
resources in order to help companies and organizations to get their long-term targets.
- Strategic management is the process of researching current and prospective
environments, setting targets of the companies and organizations, implementing and
checking the implementation of decisions in order to get such targets in current and
prospective environments.
- Strategic management starts from the stage of setting targets and determining
necessary resources, measures to implement set targets. This stage also includes how to
get such targets in the most efficient and fastest manner.
- Strategic management is a process of flexible arrangement of strategies,
operations and performances, including evaluation of use of resources, human
resources, leaders, materials, techniques and measures, new situations. Effective
combination of such factors will help better directions and strategies.
- Strategic management aims to generate strategic competition, competitive
advantages of organizations, companies. Therefore, the process of strategy requires
commitments, decisions to bind implementation and clear actions.
2. Contents of strategic management
Strategic management consists of three stages: setting, implementation and
evaluation. Besides, strategic management includes the checking and supervision of the
implementation of such strategies.
Diagram of Strategic management

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Environment
al analysis

Opportunitie

s, strategies,
threats

Strategic
estimation
(missions,
targets)

Missions,

Implementation
of strategies

Evaluation of
strategies

Targets
Strategies.

Internal
analysis

Strong
points/advantages,
weak points/
challenges

Strategic control

- Strategic estimation (missions, targets): This reflects objectives, strategies of strategy

makers.
- Environmental analysis: This analyzes general environment, environment of the
industry to check objectives, strategies and opportunities.
- Internal analysis: This analyzes Swot model, including strong points, weak
points, advantages, difficulties, challenges, and opportunities.
- Setting strategies: from the above result, analysis, evaluation, the strategy makers
transfer objectives in to missions, targets and strategies.
- Implementation of strategies: This requires the use of tools and equipment to
implement strategies.
- The stage of setting strategy includes determination of missions, setting of
targets, strategies and making of policies. Determination of missions answers the
question about survival objectives of companies, organizations. Messages on missions
should cover three main ideas: objectives, industry and benefits. Setting of targets
answers the questions about what organizations and companies get and at what period of
time. Targets should be coupled with missions and should be set on the basis of careful

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and scientific considerations as mentioned above. Making of policies gives the answer
on what way to get targets.
By setting strategies, companies determine directions for their operations,
opportunities, external threats, point out internal strong points and weak points, build
long-term targets, set strategies for alternation and select specific strategies to pursuit.
During the process of setting strategies, companies will decide to operate in what
industry, to withdraw from what industry and whether or not to participate in markets.
- In the process of implementation, it requires companies to set their annual targets,
make policies, encourage employees and allocate their resources for successful
implementation of set targets.
- Evaluation of strategies: This process evaluates successful and unsuccessful points to

adjust the whole process. This is the process of supervising and checking results of
operations, setting and implementation of strategies. This process includes the
measurement of results of companies and necessary adjustments to suit current
situations.
- Control of strategies: Control of strategies in strategic management is carried out
throughout three above processes. It is controlled at the early time of setting,
implementing and evaluating strategies. The time from estimation to evaluation of
strategies undergoes regular and strict control of a section called control of strategies.
This action is carried out regularly in order to evaluate and timely adjust steps of
strategic management for highest performance.
By control, it helps companies to properly set, implement and evaluate strategies
and perfectly allocate their resources during the implementation of strategies. It also
helps companies to defect any errors, mistakes or unusual events incurring during the
process of setting, implementing and evaluating strategies for timely responses and
adjustment. This contributes to best implementation of strategies, to take companies to
their targets and to comply with requirements of strategies.
III. Similarities and differences between strategy and strategic management

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1. Similarities:
- Strategy and strategic management are all sciences in management and products
of humans.
- Strategy and strategic management aim to direct business activities, to reach new
target and height in a scientific manner in a period of time.
- Both strategy and strategic management have contents that determine current
positions (strong points, weak points, opportunities and challenges); targets in future of
companies; measures, tools, resources for implementation; control, process of setting
and implementing strategies; evaluation of strategies.

- Strategy and strategic management are both carried out based on careful and
scientific analysis and considerations on markets, customers, consumption trends,
competitors, technological changes, legal environment, socio-economic situation,
internal strong points and weak points, external opportunities and threats.
2. Differences:
- Strategy is a directive product that determines a target to reach including
direction, measures of implementation. It, however, stops in written form, direction of a
company.
While strategic management means the management, setting and implementation
of strategies in a scientific and effective manner. Strategic management aims to set a
most appropriate strategy, to exploit all potentials and advantages of companies in order
to take companies to the highest targets in a period of time. It also aims to proper
implementation of such strategies to get targets in fastest, the most simply with least
resources of companies.
- Strategy is a part of strategic management, a product of setting strategies process.
Strategic management includes the setting, implementation of strategies and evaluation
of results and the control in all such processes.
IV. Meanings of the concept and comparison of similarities and differences
between strategies and strategic management to managers?
As mentioned above, the definition of strategy and strategic management poses a
significant meaning in management theory and science, in general, and in corporate
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management, in particular. Good strategy and strategic management help companies to
gain logical and scientific corporate management, to perfectly exploit their potentials
and advantages and to limit their weak and inappropriate points in production and
business activities for reaching the highest level in a period of time.
Thanks to business strategies, companies can determine their current positions
(strong points, weak points, advantages, difficulties, etc), their targets and desires in a

certain period of time, at the same time determine their ways and measures to go to set
targets and to control the whole process for getting such targets.
Due to business strategies that were previously set and scientifically built on
analysis of environment, industry, market forces, internal affairs, advantages, etc,
companies can eliminate sentimental factors during the process of their building and
development. It helps companies to sustainably reach their targets, to maintain their
stable production and business activities, to avoid external impacts, to keep their
development despite difficulties and fluctuations. On the contrary, companies without
strategies always make inappropriate decisions that are based on sentiments and
fortunes.
Strategic management proves significant effect to production and business
activities of companies. It helps companies to set their best strategy in order to
maximize their strong points and advantages at the same time to limit weak points,
difficulties to get highest position in a period of time. It also helps companies to
consistently implement their strategies. This leads to necessary and timely adjustments
for reaching targets in the shortest period of time with least efforts, energy and
resources.
Strategy and strategic management have close relationship. Companies with good
strategies will succeed. On the contrary, companies without good strategies (improper
directions) will definitely fail despite their good strategic management; or companies
with good strategies but without good strategic management cannot reach their targets
properly.
The distinction of similarities and differences between strategy and strategic
management helps corporate managers clearly determine contents, objectives, roles,
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effects of each stage from setting, implementation to evaluation of strategies and control
of processes in implementation. This gives companies systematic and scientific
management of strategies.

However, at present, many companies, particularly small companies, do not have
strategies or have strategies but neglect strategic management. As a result, their
operations often fall on the cycle of daily duties that relate to production or goods
purchase, seeking customers, sales, delivery, cash management, inventory management,
debts, etc. Most of such duties are carried out instantly without logical strategies, logical
management or scientific evaluation.
Involvement in such duties consumes time of leaders and embarrasses them.
Senior managers, particularly CEOs, are often misled by such duties unconsciously.
They act as in a jungle, without clear directions. They just follow any paths they find.
The more they go, the more seriously they get lost. Consequently, such companies
vastly invest in and profitable fields without considering the fact that it is very difficult
for them to become stable and sustainable companies in long time. Examples of such
companies include Vietnam Electricity (EVN), Vinashin, etc. Besides, many companies
have appropriate strategies and good strategic management. This helps them clearly
determine their targets, directions, find appropriate ways and optimally allocate their
resources to ensure their targets in a permitted period of time.
Actually, the road to success of companies varies. Vinaconex Corporation, for
example, start as a small company. But they have good strategies in labor export, which
brings them foreign currency. Then, they reinvest in trading and construction. As a
result, it soon becomes one of the biggest construction companies in Vietnam.

Conclusion
Strategy and strategic management are very significant and decisive to long-term
development of each company. Good strategy and strategic management help
companies to create scientific management of production and business activities.
Besides, thanks to good strategy and strategic management companies can determine
their objectives in future to make them motivation for development and also to
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maximize their strong points, advantages and limit weakness, difficulties. Moreover,
companies can optimally allocate their resources in production and business activities,
remain stability in any difficulties and challenges to bring the companies to preset new
height in a shortest period of time.

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