Strategic decisions are taken based on forecasts that are in turn based on available data on trends. The managers involved in strategic planning concentrate on developing projections that would take the company to better strategic position. The companies thus become proactive rather than being reactive to business situations.
Strategies have Multi Functional and Multi Business Effects Every Company has several business units. Strategic decisions are coordinative in nature among all the business units of the company. Many strategic decisions on product mix, competitive edge, organizational structure etc. affect various departments and functions that may be classified as strategic business units (SBUs). Each of these units gets affected by the decision taken at the top level, regarding allocation of resources and deployment of personnel etc.
So, Business Strategy as a discipline focuses at the organization as one single unit. Strategies are Defined Based on Study of Environment
The organization culture internal to the organization and also the external environment must be thoroughly scanned and studied to decide on strategies. The interaction between the organizations and the external environment affects both of them. The organization tends to change the environment and the same environment makes an impact on the organization. The firms have to define their strategic position with regard to the environment and decide strategies that will take it to the desired position. The firms are part of the system, where customers, stake holders, competitors etc. exist and the firm cannot remain insulated from these determinants of the external environment.
