Strategy vs. tactics

I often find that entrepreneurs have a tough time distinguishing between strategy and tactics. Strategy is the what and why of  your business at a vision level: where do you want to go with your business. Tactics is the how, when and where – the means to implement your strategy, at an operating level.

My fellow mentor Peter Dublin gave a great example of the difference in a recent mentoring session: cost is a tactic, price is a strategy.

For example, if your strategy is market share, then your tactic is to keep your price low, often volume discounts, or even use a freemium model. Conversely, if your strategy is to be profitable, your tactic is to figure out what the market will bear and make sure your gross margin – the difference in the cost of goods sold and the net revenue – will be sufficient for profitability. Then set the price accordingly.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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