The word strategy in the context of business is often misunderstood and abused. In the business world, a company’s strategy directs its direction in the long term, while a tactic is how the company meets a short term specific objective. Take a look at this article from CNN that talks about Tribune Co. filing a new reorganization program that aims to keep the media conglomerate intact. This is an example of a strategy. Now take a look at another article about Warrent Buffet hiring a new investment manager for Berkshire Hathaway. This is an example of a business tactic.
Porter’s Five Forces is a framework for analyzing how attractive an industry is. The five forces are the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, barriers to entry and the intensity of competitive rivalry. Many other academics and strategists as like Stewart Neill, Kevin P. Coyne and Somu Subramaniam have criticized Porter’s model. They state that it only works with the underlying assumptions that buyers, suppliers and competitors do not collude. that structural advantage is a source of value and that uncertainty is low, allowing planned responds to competitive behaviour by the market’s participants. An extension to Porter’s Five Forces was made by adding complementors as a sixth force to explain strategic alliances. This model is called the Six Forces Model.