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demand through TQM initiatives

good military officer would undertake even a small-scale attack on a limited objective without a clear concept of his strategy. No seasoned politician would undertake a campaign for a major office without an equally clear concept of his strategy. In the field of business management, however, we frequently find men deploying resources on a large scale without any clear notion of what their strategy is. And yet a company’s strategy is a vital ingredient in determining its future. A valid strategy will yield growth, profit, or whatever other objectives the managers have established. An inappropriate strategy not only will fail to yield benefits, but also may result in disaster.

In this article I will try to demonstrate the truth of these contentions by examining the experiences of a number of companies. I shall discuss what strategy is, how it can be evaluated, and how, by evaluating its strategy, a management can do much to assure the future of the enterprise.

Decisive Impact

The influence of strategy can be seen in every age and in every area of industry. Here are some examples:

From the time it was started in 1911 as the Computing-Tabulating-Recording Co., International Business Machines Corporation has demonstrated the significance of a soundly conceived strategy. Seeing itself in the data-system business at a time when most manufacturers were still preoccupied with individual pieces of equipment, IBM developed a set of policies which resulted in its dominating the office equipment industry.

By contrast, Packard in the 1930’s was to the automobile industry everything that IBM is today to the office machine industry. In 1937, it sold over 109,000 cars, compared with about 11,000 for Cadillac. By 1954 it had disappeared as an independent producer.

Strategy is, of course, not the only factor determining a company’s success or failure. The competence of its managerial leadership is significant as well. Luck can be a factor, too (although often what people call good luck is really the product of good strategy). But a valid strategy can gain extraordinary results for the company whose general level of competence is only average. And, conversely, the most inspiring leaders who are locked into an inappropriate strategy will have to exert their full competence and energy merely in order to keep from losing ground