Section Twoand Ohmae’s definitions focus on making hard decisions to take
resources from less promising product lines, projects, and the
like, and concentrating them in areas where the company can
obtain a strategic advantage. By failing to be selective about
opportunities and failing to make tough decisions about the
company’s distribution of resources, they are spread too thinly
across all product lines. As a result, companies that fail to
concentrate their resources are at a disadvantage.^22 Thus,
strategy performs directional, coordinating, decision-making,
and resource allocation functions.
Strategic Planning
Definitions of strategic planning, also called the strategy
formulation process,^23 differ in their emphasis on rationality and
formality. The following is James Craft’s description of
rational/comprehensive strategic planning:
The rational/comprehensive process, frequently
advocated in strategic planning texts and
apparently by many practitioners, emphasizes
purposeful activity through a logical formulation
of goals, examination of alternatives, and
delineation of plans prior to actions. It tends to
have a long-term orientation and focuses on
measurable forces affecting the firm, as well as
on quantitative activities and procedures.^24