The word "strategy" comes from the Greek language. It is derived from two words: "stratos," meaning "army," and "agein," meaning "to lead." Together, then, "strategy" literally means "leading the army." But today in business, it is given many different meanings that no longer have anything to do with the core of a strategy.
Strategy is most simply rewritten as: The steps you take to make a successful outcome as certain as possible. Period.
As a business, you want to achieve something. For some this is a particular goal, others have a particular vision, and fortunate businesses have a purpose. Every step you plan to take to get closer to your goal, your vision or to contribute maximally to your purpose is part of your strategy.
The difference between a goal, vision, and purpose
There is a big difference between a goal, a vision, and a company's purpose.
The purpose of a company is usually expressed in terms of turnover, profit, size, or sales numbers. So very financially driven and only motivating for few.
The vision of a company is about what the company sees beyond the horizon and what it wants to contribute. Vision comes from the word 'visio' which literally means to see. A visionary sees something improving in the future and wants to respond or contribute to it. Nokia, for example, was once a visionary when it predicted that everyone would start using mobile phones. Often these types of companies attract employees who are motivated by the vision and are eager to contribute to it.
A company's purpose is about what the company wants to contribute to the world or society. Purpose can be expressed in terms such as an energy-efficient world, or a world where everyone has food to eat. These are ideals to which the company aspires and then contributes to its business. Purpose is one of the greatest motivational tools a company can have because employees with similar ideals want to and will contribute fully to it.
The role of a mission
For all three, you can also describe the mission. A mission is best translated as the role you take to achieve your goal or vision or contribute to your purpose. Think of a former missionary.
The priest (what they were), as a missionary (the mission/role), went to convert people (the goal) so that everyone around the world would convert to God (the vision) and be allowed to go to heaven (the purpose).
How do you determine the strategy?
In the example above of the priest, there are different paths to take. In other words, different ways and styles to achieve the goal and vision and contribute to the purpose. He can go alone or with a group, on foot or by boat, forcing people to convert, or trying to influence them. All choices fall under the strategy.
To determine a strategy, however, you first need a goal, vision, or purpose, otherwise, you cannot assess whether the strategy will be effective. This always remains difficult, because you are talking about steps you want to take in the future. Market and economic conditions can cause any strategy to fail, but by learning from the past and using common sense, you can build in a fair amount of certainties.
With a strategy comes your tactics.
Tactics are about how the strategy works operationally. In the priest's example, tactics describe exactly which people you will be setting out with, what ship you will take, what route you will take, and what sword you will take with you to crush those who do not convert.