Which statement best describes Business Strategy?

Which statement best describes Business Strategy?

• A. How to compete successfully in particular markets, relates to activities of Strategic Business Units (SBU or Divisions)
• B. Medium term, mix of external & internal
• C. Which products/services to develop in their markets
• D. How to gain a competitive advantage in their market

Answer: (A)

Business strategy is about how a firm competes in its chosen markets and how it organises to do that, usually through the actions of Strategic Business Units or divisions. This choice captures both the market focus and the way the organization implements its approach in each unit, which is what strategy is all about in practice. The other statements are narrower. Describing a medium-term planning horizon with a mix of external and internal factors talks more to how planning is done, not what strategy is. Selecting which products or services to develop is a specific portfolio or product decision, not the whole approach to competing in markets. Describing the goal of gaining a competitive advantage states the aim of strategy, but not the way the firm competes across particular markets or how that competition is organized within SBUs.

Business strategy is about how a firm competes in its chosen markets and how it organises to do that, usually through the actions of Strategic Business Units or divisions. This choice captures both the market focus and the way the organization implements its approach in each unit, which is what strategy is all about in practice.

The other statements are narrower. Describing a medium-term planning horizon with a mix of external and internal factors talks more to how planning is done, not what strategy is. Selecting which products or services to develop is a specific portfolio or product decision, not the whole approach to competing in markets. Describing the goal of gaining a competitive advantage states the aim of strategy, but not the way the firm competes across particular markets or how that competition is organized within SBUs.